Defined Benefit Plan inside Trust – Trustor Passed Away

Submitted by willem ooms on Wed, 2023-02-08 20:32

I am trustee of a trust that includes a defined benefit plan. The decedent put it in his trust as he had young grand children from a deceased child and one other child who is older. Trust also named a girlfriend as a beneficiary with a stipulated amount.

1. How many years are allowed to distribute the assets?
2. The pension administrator has had the trust take RMD’s
3. Can I roll this DB plan over into an IRA for each of the beneficiaries?

Thank you.



Submitted by Alan - IRA critic on Wed, 2023-02-08 23:00

  1. 10 years with annual RMDs required in years 1-9 only if decedent passed after their RBD and after 2019. The trust must be qualified for look through. If the trust is not qualified for look through the plan must be distributed in 5 years if participant passed prior to RBD, or over participant’s remaining LE of they passed after RBD.
  2. That suggests death after RBD, or prior to 2020.
  3. If the trust provisions so permit, but the DB plan will probably not accept assignment from the trustee to an inherited IRA. Can always ask.
  4. Note that the dollar amount for the girlfriend (known as a “pecuniary benefit” may present some highly technical issues in the trust. Consult with an experienced estates attorney on that.

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