In short, YES, you can designate a trust as the future beneficiary of your 401k retirement account.
Leaving your inheritance in a trust allows you to control where and how your assets are divided up after your death. Learn the pros and cons to this type of legacy planning, given IRS rules and limitations.
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A trust beneficiary for a 401k account is ideal if any of the following scenarios applies to you:
It is possible to roll the funds into a Stretch IRA to ensure that only the Required Minimum Distributions are paid out to recipients named in the trust, month by month. Passing money on through an IRA or 401k beneficiary form allows you the ability to bypass the expense of probates and lawyers.
There are certain caveats to designating your 401k to a trust beneficiary:
Ubiquity is a low-cost 401k plan provider offering flat-fee customer service for employers and employees. We invite our investors to contact us at any time with questions such as this, as we are always happy to help with their retirement planning needs – without charging exorbitant financial advisory fees.