A:

The requirements that a trust must meet to be qualified are as follows:

  1. The trust must be a valid trust under state law or would be except for the fact that there is no corpus.
  2. The trust must be irrevocable or will, by its terms, become irrevocable upon the death of the retirement account owner.
  3. The beneficiaries of the trust concerning the trust's interest in the retirement owner's account must be identifiable from the trust instrument.
  4. The IRA trustee, custodian or plan administrator must be provided with either a copy of the trust instrument - including the agreement that, if the trust instrument is amended, the administrator will be provided with a copy of the amendment within a reasonable time - or all of the following:

    I. A list of all the beneficiaries of the trust (including contingent and remaindermen beneficiaries with a description of the conditions on their entitlement).

    II. Certification that, to the best of the owner's knowledge, the list is correct and complete and that the requirements of (1), (2) and (3) above are met.

    III. An agreement that, if the trust instrument is amended at any time in the future, the owner will, within a reasonable time, provide to the IRA trustee, custodian or issuer corrected certifications to the extent that the amendment changes any information previously certified.

    IV. An agreement to provide a copy of the trust instrument to the IRA trustee, custodian or issuer upon demand.

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
  2. Can I put my IRA in a trust?

    Learn the proper way to transfer ownership of your IRA to a trust. Consider how naming the trust as a beneficiary affects ... Read Answer >>
  3. Are life insurance trust proceeds taxable?

    I am due 1/3 of a $1 million irrevocable trust from my mom. I want to close out the trust and wonder what taxes may be involved ... Read Answer >>
  4. How does a revocable trust become a split-interest trust?

    Learn how a revocable trust becomes a split-interest trust upon the death of the of the grantor when there are both charitable ... Read Answer >>
  5. Is there a time limit on collecting on the trust fund?

  6. What happens when a will and a revocable trust conflict?

    Learn why a revocable trust supersedes a will, but only for the assets held in the trust, when there is a conflict between ... Read Answer >>
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  2. Retirement

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  3. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  4. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  5. Retirement

    Estate Planning: Introduction To Trusts

    by Cathy Pareto, CFP®, AIF® (Contact Author | Biography) A trust is an agreement that describes how assets will be managed and held for the benefit of another person. There are many ...
  6. Retirement

    How to Set Up a Trust Fund in Canada

    You don't have to be rich to make use of a trust fund. Rules can be complex; here's what you'll need to discuss with your lawyer.
  7. Financial Advisors

    Passing an IRA to a Trust: The Good and Bad

    Creating a trust is a common estate planning tactic, but naming a beneficiary to an IRA to a trust may have unintended consequences.
  8. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  9. Personal Finance

    Living Trusts vs. Simple Wills: A Comparison

    A look at wills versus living trusts and when to choose one over the other.
  10. Personal Finance

    What's an Irrevocable Trust?

    In an irrevocable trust, the grantor gives up the right to revise, amend or terminate the trust without the permission of the beneficiary. An irrevocable trust is best used as an estate-planning ...
RELATED TERMS
  1. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  2. Qualified Trust

    A tax-advantaged fiduciary relationship between an employer and ...
  3. Beneficiary Of Trust

    A beneficiary of trust is a person for whom a trust was created, ...
  4. Blind Trust

    A trust in which the executors have full discretion over the ...
  5. Bare Trust

    A basic trust in which the beneficiary has the absolute right ...
  6. Grantor Retained Annuity Trust - GRAT

    An estate planning technique that minimizes the tax liability ...
Trading Center