Hickoo

Thanks for the comments.

Generally, if a plan disaggregates otherwise excludable employees to satisfy the coverage requirements of IRC §410(b) its my understating it must do the same for nondiscrimination testing. My question, if the plan does NOT disaggregate for coverage CAN it be disaggregated for nondiscrimination testing i.e., ADP/ACP. In other words 410(b) would not be disag'd but ADP would be...?

Thanks so much for the response... All criteria in terms of Trust establishment were satisfied. The sticking point is whether because the trust bene (decedent’s child) has/had the testamentary power of appointment to name a nonperson as a beneficiary in the event of his/her death precludes them from being an actaul designated bene and therefore not eligible for lifetime payout? If precluded from being a designated bene they'd be subject to the much shorter 5 year payout/

Fact pattern: involves an Irrevocable Trust that was named the beneficiary of an IRA. The Trust does not hold other assets. The IRA owner died in 2004 prior to the attainment of age 50 and the sole beneficiary of the Trust is the decedents child age 23 in 2005. The child was to receive benefits received by the Trust from the IRA during their lifetime. The child had the right upon death by will or general testamentary power of appointment to designate someone other than an individual to receive any amount remaining in the IRA upon death. Thus there is a question of whether the child qualifies as a “Designated Beneficiary.” In sum, the questions; Because the child, as beneficiary of the trust, has/had general testamentary power of appointment to designate someone other than an individual/person to receive any amount from the IRA in the event of their death does this disqualify them as a “Designated Beneficiary” and therefore the 5 year payout rule would apply?Are there any circumstances under which a primary designated beneficiary has the right to name a secondary beneficiary who is not an individual and still be considered a “Designated Beneficiary?”