My client is a thirty-six-year-old male with a thirty-four-year-old spouse, a female. My client has $600,000 in his 401(k) plan and the attorney wants to make the beneficiary, the residuary trust of the clients estate and just so the question doesn’t come up, the trust exists in the form of a revocable trust. The attorney put in a provision that if any benefits are ever payable to the trust that a distribution must be taken annually, regardless of age, as income to the trust and immediately distributed to the spouse.

My question centers around the mandatory distribution from the retirement account now part of the trust. If the spouses had been named the direct beneficiary, she can either defer distributions or create an IRA rollover and defer withdrawals until her age 72.

If the trust’s is name the beneficiary and the beneficiaries of the trust is thirty-four, would the trust be required to make distributions prior to the spouses age 72.

Any guidance would be appreciated.