Article VIII of Form 5305 allows any trust provision under state law that is not inconsistent with 408(a). IRA participants typically are able to withdraw funds from their accounts at will. What if you had a spendthrift IRA participant who wanted protection against himself from withdrawing his retirement funds and blowing them? Would an Article VIII provision giving the trustee discretionary distribution power over distributions to grantor be inconsistent with 408(a)(4)?

The IRS and the courts have historically said 408(a)(4) prevents forfeiture of an IRA balance as a penalty to the IRA custodian/trustee or employer. Therefore, I think such a discretionary distribution provision would not be prohibited by anything in 408(a). Just wondering if anyone had any thoughts on this issue. Thanks.