Definition
A see-through trust is a trust that satisfies the requirements so as to be treated as a designated beneficiary. For retirement accounts inherited before 2020, the life-expectancy of the oldest trust beneficiary’s would be used for life-expectancy distributions. For retirement accounts inherited after 2020, the 10-year rule would apply to a trust that is designated beneficiary, and the life-expectancy option would be available only if the trust is an eligible designated beneficiary.
A trust is a see-through trust if it meets the following requirements:
- The trust is a valid trust under state law, or would be but for the fact that there is no corpus.
- The trust is irrevocable or will, by its terms, become irrevocable upon the death of the employee.
- The beneficiaries of the trust who are beneficiaries with respect to the trust’s interest in the employee’s benefit are identifiable
- Certain documentation requirements are satisfied
Plan participants, IRA owners, and beneficiaries should consult with their estate planning attorney for assistance with ensuring that the requirements are met, if the goal is to designate a see-through trust as the beneficiary of the retirement account.
Referring Cite
Treas. Reg. §1.401(a)(9)-4, Q&A-5
Additional Helpful Information
- If the spouse of the participant is the sole beneficiary of the trust, the participant may apply the RMD calculations rules that would apply had the spouse been the direct beneficiary
