What is a 'see-through' trust for IRA beneficiary purposes?

A see-through trust is a trust that qualifies under the regulations at Treas. Reg. §1.401(a)(9)-4 to allow the IRS to 'look through' the trust to its individual beneficiaries for determining post-death IRA distribution rules. Without see-through qualification, the trust is treated as a non-individual beneficiary and faces accelerated distribution rules (5-year rule if owner died before required beginning date; remaining life expectancy of decedent if after). See-through qualification requires: (a) trust is valid under state law, (b) trust becomes irrevocable at owner's death, (c) trust beneficiaries are identifiable, (d) certain trust documentation is provided to the plan administrator by 31 October of the year after death.

What is the difference between a conduit trust and an accumulation trust?

Both are see-through trusts but distribute IRA proceeds differently. A conduit trust passes all IRA distributions through to the individual beneficiary as received; the trust holds only the IRA. The IRS looks only at the conduit beneficiary's life expectancy for distribution timing, simplifying the analysis. An accumulation trust can retain IRA distributions and hold them in trust for the beneficiary's later benefit; the IRS looks at all potential beneficiaries (current and remainder) to determine the slowest distribution rule. Conduit trusts are simpler and produce more favorable distribution timing; accumulation trusts provide more control over the beneficiary but face more restrictive distribution rules.

Can a 401(k) or IRA Be in a Trust? See-Through Trusts and the SECURE Act 10-Year Rule (2026)

Q: Can an IRA or 401(k) be transferred to a revocable trust during the owner's life?

No. IRAs and 401(k)s cannot be transferred to a trust during the owner's life. The owner must remain the named account holder under federal law (IRC §408 for IRAs; ERISA and IRC §401 for 401(k)s). Attempting to transfer an IRA to a trust is treated as a complete distribution of the IRA, triggering ordinary income tax on the full balance (and 10% early withdrawal penalty if the owner is under 59½). The IRA loses its tax-deferred status. The proper estate planning approach is to name the trust as the IRA beneficiary, not to transfer the IRA to the trust.

Q: What is the SECURE Act 10-year rule?

Under the SECURE Act of 2019 (and SECURE 2.0 of 2022), most non-spouse beneficiaries of an IRA or 401(k) must withdraw the entire account balance within 10 years of the original owner's death. The pre-SECURE-Act 'stretch IRA' that allowed beneficiaries to take distributions over their own lifetime is generally no longer available. The 10-year rule applies to beneficiaries who are not Eligible Designated Beneficiaries (EDBs); EDBs (surviving spouse, minor child of owner, disabled or chronically ill individual, individual not more than 10 years younger than owner) can still take life-expectancy distributions.

Q: Should I name a trust as my IRA beneficiary?

It depends. Trust as IRA beneficiary makes sense when: (a) the intended beneficiary is a minor child, disabled person, or someone with creditor exposure or spendthrift concerns, (b) the IRA owner wants to control distributions to beneficiaries (staggered amounts, age restrictions, conditions), (c) state estate tax planning requires the IRA to be held in a credit-shelter trust. Naming the trust adds drafting complexity (must be see-through compliant) and may force more rapid distributions under the 10-year rule. For straightforward planning where the beneficiary is a competent adult who can manage the IRA themselves, naming the individual directly may be simpler.

IRAs and 401(k)s cannot be re-titled to a trust during life. A trust can be the beneficiary at death, but must qualify as a see-through trust under the §1.401(a)(9)-4 regulations to preserve favorable distribution timing under the SECURE Act 10-year rule.

Not legal or tax advice. Naming a trust as beneficiary of an IRA or 401(k) involves complex coordination of trust drafting, retirement plan distribution rules under IRC §401(a)(9), and the SECURE Act. Drafting errors can dramatically accelerate distribution and increase tax. Consult a qualified estate planning attorney experienced in IRA beneficiary trusts.

Why IRAs Can't Be Re-Titled to a Trust During Life

Under IRC §408 (IRAs) and IRC §§401(a) and 401(k) (qualified retirement plans), the account must be held by an individual (or a permitted trust trustee for self-directed retirement plans). A revocable trust is not an authorized IRA holder. Attempting to retitle an IRA to a trust is treated by the IRS as a complete distribution of the IRA, triggering ordinary income tax on the full balance plus the 10% early withdrawal penalty if the owner is under 59½.

The same rule applies to 401(k) accounts during employment and after rollover to an IRA. The 401(k) cannot be transferred to a trust during the owner's life without first being distributed (taxable event). After rollover to an IRA, the same prohibition applies.

For estate planning purposes, the IRA owner names beneficiaries on the IRA beneficiary designation form, not by re-titling. The beneficiaries can include individuals, a trust, an estate, or a combination (with primary and contingent beneficiaries). The beneficiary designation governs at the owner's death, and the IRA passes outside probate to the designated beneficiary.

The SECURE Act 10-Year Rule

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 dramatically changed post-death IRA distribution rules for non-spouse beneficiaries. Under the SECURE Act, most non-spouse beneficiaries must withdraw the entire IRA balance within 10 years of the owner's death. The pre-SECURE-Act "stretch IRA" allowing distributions over the beneficiary's lifetime is generally no longer available.

The IRS issued final regulations under Treas. Reg. §1.401(a)(9) on 19 July 2024 (effective for distribution years beginning on or after 1 January 2025) implementing the SECURE Act and SECURE 2.0 rules. The regulations clarify the 10-year rule, the see-through trust requirements, and the determination of Eligible Designated Beneficiaries.

Under the final regulations, if the IRA owner died on or after their Required Beginning Date (April 1 of the year after age 73 for owners born 1951-1959, age 75 for owners born 1960+), beneficiaries subject to the 10-year rule must also take annual Required Minimum Distributions (RMDs) during years 1-9 and exhaust the account in year 10. If the owner died before the Required Beginning Date, no annual RMDs are required in years 1-9, but the account must still be exhausted by year 10. The post-death annual RMD requirement was a controversial late addition to the regulations and dramatically accelerates the distribution and tax recognition compared to a single year-10 lump sum.

Eligible Designated Beneficiaries (EDBs)

The SECURE Act preserved the pre-SECURE-Act stretch IRA for five categories of "Eligible Designated Beneficiaries" (EDBs):

Surviving spouse: continues to have the option to roll over the IRA to their own IRA (most favorable) or to remain as a beneficiary and take life-expectancy distributions.
Minor child of the owner: takes life-expectancy distributions until reaching the age of majority (under the SECURE Act, age 21 for this purpose), after which the 10-year rule applies. Minor children of someone other than the owner are not EDBs.
Disabled individual: as defined under the regulations (substantially equivalent to the IRC §72(m)(7) disability standard).
Chronically ill individual: as defined under IRC §7702B(c)(2).
Individual not more than 10 years younger than the owner: typically siblings or close-age friends; not children or grandchildren who are usually more than 10 years younger.

EDB status is determined at the owner's death. EDBs can take distributions over their single life expectancy (using the Single Life Table under Treas. Reg. §1.401(a)(9)-9). For trust beneficiaries to qualify as EDBs, the trust must satisfy specific see-through requirements and the trust beneficiary structure must point through to an EDB individual.

See-Through Trust Requirements

For an IRA naming a trust as beneficiary, the trust must qualify as a "see-through" trust under Treas. Reg. §1.401(a)(9)-4 for the IRS to look through to the individual beneficiaries for distribution rule purposes. Without see-through qualification, the trust is a non-individual beneficiary, subject to the 5-year rule (if owner died before RBD) or remaining life expectancy of the deceased owner (if after RBD).

The see-through requirements are:

Trust valid under state law: the trust must be legally valid as a trust under the law of the state where it was created.
Trust irrevocable on owner's death: the trust must be irrevocable or become irrevocable by its terms at the owner's death.
Beneficiaries identifiable: the beneficiaries of the trust who will receive the IRA proceeds must be identifiable from the trust instrument.
Documentation provided to plan administrator: by 31 October of the year following the year of death, the trustee must provide the plan administrator with either (a) a copy of the trust, or (b) a list of all primary and contingent trust beneficiaries with descriptions of their interests.

All four requirements must be satisfied for see-through treatment. Drafting errors that fail any requirement convert the trust to a non-individual beneficiary, with much less favorable distribution timing.

Conduit Trust vs Accumulation Trust

A see-through trust can be structured as a conduit trust or an accumulation trust:

Conduit trust: the trust passes all IRA distributions to the conduit beneficiary as received. The trust holds only the IRA (or specifically the IRA beneficiary interest). The IRS looks only at the conduit beneficiary's life expectancy or applicable distribution rule. Simpler analysis: only one beneficiary's age and EDB status matter. Disadvantage: conduit trust does not control the IRA distributions after they reach the beneficiary; the beneficiary receives the distributions personally and may use them however they wish.

Accumulation trust: the trust can retain IRA distributions and hold them in further trust for the beneficiary or for future beneficiaries. More control over the use of the IRA proceeds. Disadvantage: IRS looks at all potential beneficiaries (current and remainder) to determine the applicable distribution rule, applying the "slowest" distribution rule of any beneficiary. If any potential beneficiary is a non-individual (e.g., a charity as remainder beneficiary), the trust may be a non-see-through trust with accelerated distribution. Accumulation trusts also typically use the 10-year rule (if all beneficiaries are individuals subject to the 10-year rule) without EDB stretch.

The choice between conduit and accumulation trusts depends on (a) the importance of post-death control over the IRA proceeds, (b) the beneficiary's competence and creditor risk, (c) whether any beneficiary qualifies as an EDB. Conduit trusts are simpler and more tax-favorable for an EDB beneficiary; accumulation trusts provide more control for minors, disabled beneficiaries, or beneficiaries with creditor concerns.

The 31 October Deadline

The §1.401(a)(9)-4 regulations impose a strict deadline: by 31 October of the year following the year of the IRA owner's death, the trustee must provide the plan administrator with documentation establishing see-through status. The documentation can be either (a) a copy of the trust instrument, or (b) a final list of all primary and contingent beneficiaries with descriptions of their interests.

Missing the deadline can convert the trust from see-through to non-individual beneficiary status, with much less favorable distribution timing (5-year rule or remaining life expectancy). The trustee should calendar this deadline immediately upon learning of the death and complete the filing well before the deadline.

Frequently Asked Questions

Can an IRA or 401(k) be transferred to a revocable trust during the owner's life?

No. Federal law (IRC §408 for IRAs, §401 for 401(k)s) requires individual ownership during life. Attempting to transfer is treated as a complete distribution: ordinary income tax on full balance plus 10% early-withdrawal penalty if under 59½. Proper approach: name trust as beneficiary, not retitle.

What is the SECURE Act 10-year rule?

Most non-spouse IRA beneficiaries must withdraw the full account within 10 years of the owner's death. Final regulations (effective 1 January 2025) also require annual RMDs in years 1-9 if owner died after RBD. Pre-SECURE-Act 'stretch IRA' over beneficiary lifetime is generally no longer available.

What is a see-through trust?

A trust qualifying under Treas. Reg. §1.401(a)(9)-4 to allow IRS to look through to individual beneficiaries for IRA distribution rules. Requirements: (1) valid under state law, (2) irrevocable on owner's death, (3) beneficiaries identifiable, (4) documentation to plan administrator by 31 October of year after death.

Conduit trust vs accumulation trust?

Conduit: passes all IRA distributions through to beneficiary; IRS looks only at conduit beneficiary. Accumulation: retains distributions for future beneficiaries; IRS looks at all potential beneficiaries (current + remainder), applies slowest rule. Conduit simpler and more favorable for EDBs; accumulation provides more control.

Should I name a trust as my IRA beneficiary?

Yes when: minor beneficiary, disabled beneficiary, beneficiary with creditor exposure, need to control distributions, or state estate tax planning requires credit-shelter trust treatment. No when: competent adult beneficiary, simplicity preferred, EDB stretch is important and trust would forfeit it.