Naming Spouse’s Revocable Trust as 401k/IRA Beneficiary

Submitted by Anne Marie Guglielmo on Thu, 2015-10-08 00:03

Husband names his spouse’s revocable trust as his primary 401k and IRA beneficiary. Assuming the spouse survives, she would have the ability to withdraw any assets in her revocable trust. My questions are (1) does the revocable trust allow the spouse to make a spousal rollover, and if so, does she actually have to withdraw the account from the trust to do so or can the account remain in the revocable trust assuming the usual revocable trust terms that allow for the income and principal to be withdrawn/distributed to the grantor spouse during her lifetime (i.e., not RMD/conduit trust language); and (2) why would someone want to do this rather than just naming the spouse directly?



Submitted by Bruce Steiner on Fri, 2015-10-09 02:09

  1. I’ve never seen this, I would be willing to apply for a private letter ruling allowing the spouse to do a rollover if the financial institution required a ruling.  
  2. I’ve never seen this or heard of this, and I doubt that this is common.  However, people do lots of things that don’t make sense.  I’ve written two articles on spousal rollovers where the spouse was not the named beneficiary.  Many of the private letter rulings involve fairly complicated estate plans.  I couldn’t help but wonder why IRA owners created these complicated plans that required obtaining private letter rulings when they could have simply named the spouse as beneficiary.  Here are the articles:  
  3. http://kkwc.com/wp-content/uploads/2015/04/AR20050125164755.pdf#toolbar=1&navpanes=0&nameddest=self&page=1&view=FitH,0&zoom=80,0,0
  4. http://kkwc.com/wp-content/uploads/2015/08/IRA-Rollovers-Making-this-option-possible.pdf#toolbar=1&navpanes=0&nameddest=self&page=1&view=FitH,0&zoom=80,0,0.


Submitted by Anne Marie Guglielmo on Wed, 2015-10-14 23:32

Thank you, Bruce.  



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