M had a Tax Qualified Money Purchase Plan at broker X, and passed away after the RBD was made. No beneficiary was specified on the MPP. However, M did prepare before death an all inclusive trust, a pourover will, and a designation of beneficiaries. In all of these documents, there is a sole trustee, executor, and beneficiary named S. Probate was followed and Letters Testamentary issued to S. S presented the probate approved trust, pourover will, designation of beneficiaries and Letters Testamentary to broker X. For two months broker X does nothing, only replying that X is working on a solution. Then, they issue a form for S to sign a discharge of liability against X as a precondition for creating a new account in which S will be named as trustee:

“… To release and forever discharge X and each of its present and former employees, officers, directors, principals, agents, heirs, executors, administrators, predecessors, successors, assigns, representatives, parents, subsidiaries, affiliates, and attorneys from any and all claims, demands, actions, causes of action, contracts, obligations, suits, debts, costs, or liabilities, whether presently known or unknown, that the undersigned have or ever may have against X and such other parties in connection with the subject matter of this Agreement and by reason of X’s honoring the request of the undersigned to acknowledge S as the Plan Trustee …” and so on.

But actually S would be just as happy to have the account opened in the name of M’s estate, S Executor, as X is surely required to do by law (I’m guessing here), without S signing any discharge of liability form and then as executor transfer that estate account to an IRA account for S personally on closing of probate in less than two months.

S has often heard that the advantage of a trust is avoiding probate. But in this case, probate has already proceeded to Letters Testamentary, so there is no advantage to turning this MPP into a trust – in fact it seems like needless complexity.

What would be the smart thing for S to do? And what is X’s motivation for spending so much time creating this complex legal documents and making things difficult, and risking pushing probate beyond the four month deadline? (for which it seems like they really could create a liability)