How to Name a Trust as Successor Beneficiary of an Inherited IRA

By Kay Lee

When someone creates an Individual Retirement Account, she names a beneficiary to inherit whatever remains in the account at her death. Depending on the IRA plan document or the rules of the custodian, the IRA owner or the IRA owner's beneficiary may be able to name a successor beneficiary for any remaining account balance at the primary beneficiary's death. This can be an individual or individuals, the decedent's estate or a trust. One advantage to naming a trust as successor beneficiary is control over how and when distributed assets will be paid out to heirs. For example, if, as a primary beneficiary, you want your child to receive your undistributed IRA inheritance, but don't want her to have access to those funds until age 21, the IRA account will be distributed to the trust based on IRS distribution rules, however, the trust document will specify that the trustee should not distribute those funds to your child until she reaches age 21.

Step 1

Create a trust, if the trust you want to name as a successor beneficiary has not already been created. Given that trusts are complex legal instruments, you should consult with an estate planning attorney in order to ensure that the trust meets all state and federal laws and is designed to distribute funds in the way you wish.

Step 2

Contact the custodian for your IRA to obtain the forms necessary to change beneficiaries.

Protect your loved ones. Start My Estate Plan

Step 3

Execute the beneficiary change forms and include all requested information on the forms and return them to your IRA custodian.

Step 4

Provide a copy of the trust document to your IRA custodian with the beneficiary change forms, so the custodian will have the information necessary to distribute IRA funds from your trust according to your wishes.

Protect your loved ones. Start My Estate Plan
How to Move an IRA to an Irrevocable Trust


Related articles

How to Name a Beneficiary When Divorced With Minor Children

In most divorces, a noncustodial parent will be required to maintain a life insurance policy for the benefit of any minor children. This is because the noncustodial parent will probably be paying child support. If he dies, the children still need that financial support. This is why life insurance is often required. However, many policies do not permit a minor child to receive life insurance funds until age 18. Therefore, there are steps that can be taken to ensure that minor children with divorced parents are financially protected in the event of the death of the noncustodial parent.

What Age Do You Need to Be to Inherit a Trust From a Will?

People cannot legally inherit money or other property from you until they reach the age of adulthood. You can, however, provide ways for a minor to have access to some of the money while she is underage to provide for her needs; later, when she is older, she can inherit outright. Your will or trust can also set a specific age for your beneficiary to take control of the assets -- for example, if your trust documents say that your beneficiary must wait until age 30 to inherit, that becomes the age she needs to be to inherit. Setting up a trust in your will is one way to safeguard a minor's inheritance.

Can a Bank Turn Over a Bank Account to a Sole Heir Without Probate?

People have a wide range of preferences regarding what happens to their personal assets after their deaths. Unfortunately, without careful and individualized planning, distribution of your property to surviving loved ones may be restricted by probate court, even if you have only one heir. However, in some instances, federal banking regulations allow the funds deposited in financial institutions to be disbursed directly to beneficiaries upon the account holder's death.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

IRA Beneficiary Rules

An individual retirement arrangement is a savings plan designated for retirement purposes. By designating it as ...

How to Retitle an IRA When a Successor Beneficiary Inherits the IRA

If you inherit an IRA from your spouse, you can roll it over to a new IRA in your name or merge it with your own ...

Do IRAs Override a Last Will & Testament?

The beneficiary form you complete when you open an IRA is like a “mini-will” for your retirement account. Because your ...

Difference Between the Primary & the Successor on a Change of Beneficiary

Individuals name primary and successor beneficiaries on specific money holdings, including life insurance benefits, ...

Browse by category
Ready to Begin? GET STARTED