Rollover to IRA fbo Trust

[luissaha]

A participant in a DB plan designated his trust as beneficiary for payment of death benefits. Upon his death, the trustee of the trust requested a direct rollover to an IRA established fbo the trust. I've never seen this. Can the plan rollover the money to the IRA? Any thoughts would be appreciated.

[Flyboyjohn]

No can do, while the beneficiary of an IRA can be a Trust the owner of an IRA can only be an individual.

[luissaha]

Look at IRA Notice 2007-7, Q&A 16. Based on this, it appears to me that if the inherited IRA is established in the name of the trust, as beneficiary of the deceased plan participant, a direct trustee to trustee transfer is allowed.

[JJRetirement]

"No can do, while the beneficiary of an IRA can be a Trust the owner of an IRA can only be an individual."

I don't think this is true. A trust cannot be a "designated beneficiary" under the 401(a)(9) minimum distribution rules, so the 5 year rule would generally apply for RMD purposes (unless meets requirements for a see-through trust, in which case the trust beneficiary's expected lifetime could be used-- with many exceptions and variations on the rules for sole spouse beneficiaries, multiple beneficiaries, etc) But that doesn't mean that a trust can't be the beneficiary of the IRA or a qualified plan. It may mean that using a trust as a beneficiary often isn't a good idea.