Save time with our cheat sheets, fact sheets, checklists & books!

April 18, 2009


The definition of a trustee depends on the capacity in which the party is serving. Trustee includes :
  • Banks and trust companies serving as trustees for IRAs, in the capacity of a Custodian (upper case C-Custodian) . In such a capacity, the trustee is responsible for perform certain tax reporting and accounting for the IRA
  • Individuals or entities serving as a trustee for a qualified plan. In such cases, the plan document usually defines the duties of the trustee, which can be separate from those for which a Custodian is responsible. Such duties can include:
    • Providing important information necessary for the plan administrator to effectively perform his duties
    • Processing distributions to plan participants and beneficiaries
    • Maintaining record-keeping on contributions, distributions, loans, rollovers and earnings for participants
  • Individuals or entities serving as trustees for trusts, other than retirement accounts. The trusts would define the duties of the trustee. In some cases, the trustee’s duties are also defined by state law.
Trustee is sometimes used interchangeably with  custodian, when referring to IRAs
Referring Cite
IRC § 408(n)
Additional Helpful Information
  • A trustee can be a discretionary trustee, a directed trustee or serve as both. In cases where a trustee serves as both a directed trustee and a discretionary trustee, the trust or plan document would define the instances in which the discretionary and directed roles would apply.
  • The terms of the trust agreement should provide for a party to be a successor trustee, in the event the trustee is unable to perform its duties  

Keep Learning

Qualified Charitable Distribution (QCD)

Definition A distribution that is excludable from the distributee’s income, as a result of meeting the following requirements: It is made after the distributee reaches

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

Be among the first to know when

IRA Rules