Yes—a trust can be named as the beneficiary of an IRA, either primary or contingent. Federal tax law allows the arrangement as long as the trust is structured so the IRS can look through it and identify the individuals who will actually receive the money.1eCFR. 26 CFR 1.401(a)(9)-4 – Determination of the Designated Beneficiary Doing it correctly matters more than deciding to do it: a trust that meets the IRS requirements gives the account owner continued control after death, and a trust that misses them accelerates taxes sharply.
Why Route an IRA Through a Trust
Naming an individual directly is simpler and usually cheaper. A trust earns its place when the person you want to benefit shouldn’t hold the money outright. Common reasons include a minor child, a beneficiary with a disability who relies on needs-based benefits, a beneficiary who cannot manage money, a second marriage where you want to provide for a spouse while preserving the remainder for children, and situations where creditor or divorce exposure is a concern. The trust also lets you dictate timing—for instance, staggering distributions over years rather than handing over the full balance at once.
The Four See-Through Trust Requirements
A trust that inherits an IRA is called a “see-through” (or look-through) trust when it satisfies four conditions under the Treasury regulations. Meeting them lets the IRS treat the individual beneficiaries of the trust as the designated beneficiaries of the IRA for distribution purposes.1eCFR. 26 CFR 1.401(a)(9)-4 – Determination of the Designated Beneficiary
- The trust is valid under state law.
- The trust is irrevocable, or becomes irrevocable at the IRA owner’s death, so the roster of beneficiaries is fixed.
- Every person who can benefit from the trust is identifiable from the trust document.
- A copy of the trust (or a qualifying certification) reaches the IRA custodian by October 31 of the year following the owner’s death.
Two Drafting Mistakes That Quietly Break the Rules
The “identifiable individual” requirement is where well-intentioned trusts fail. If any potential beneficiary is a non-individual—a charity, an estate, another entity—the IRS treats the IRA as having no designated beneficiary at all, even if human beneficiaries are also named.2Internal Revenue Service. PLR-129378-19 A charitable remainder tucked into an otherwise ordinary family trust is enough to do it.
A broad power of appointment can do the same damage. If a beneficiary can redirect trust assets to people not listed in the document, and that power isn’t limited to a defined group of individuals or to an ascertainable standard (health, education, support, maintenance), the identifiable-beneficiary requirement can fail.
What Happens if the Trust Isn’t a See-Through
A trust that misses see-through status is treated as a non-designated beneficiary.3Office of the Law Revision Counsel. 26 U.S. Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans The payout timeline collapses:
- If the owner died before the required beginning date (currently age 73), the account must be emptied within five years.3Office of the Law Revision Counsel. 26 U.S. Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans
- If the owner died on or after the required beginning date, distributions are taken over the deceased owner’s remaining statistical life expectancy.4Internal Revenue Service. Required Minimum Distributions for IRA Beneficiaries
Both outcomes bunch taxable income into a shorter window than the 10 years a qualifying see-through trust gets.
Conduit or Accumulation: The Design Choice
Every see-through trust is either a conduit trust or an accumulation trust, and the choice shapes both tax and control.
Conduit Trust
The trustee must pass every IRA distribution straight through to the named beneficiary as it comes in. No holding back. Because the money doesn’t sit in the trust, it’s taxed on the beneficiary’s personal return at individual rates, and the IRS looks only at the immediate beneficiaries when applying distribution rules.5Internal Revenue Service. Internal Revenue Bulletin 2024-33 – Section 401(a)(9) Regulations The tradeoff is control: once the distribution leaves the trust, it’s the beneficiary’s money, exposed to the beneficiary’s choices and creditors.
Accumulation Trust
The trustee can hold IRA distributions inside the trust and decide when to pay them out.5Internal Revenue Service. Internal Revenue Bulletin 2024-33 – Section 401(a)(9) Regulations This is the structure used for beneficiaries who cannot handle money directly, or when creditor protection needs to extend past the year of distribution. The cost is twofold. Any income the trust keeps is taxed at trust rates, which reach the top bracket almost immediately. And the IRS considers all potential beneficiaries, including remainder beneficiaries, when applying distribution rules, which is where a charity or other entity buried in the remainder can wreck see-through status.
The 10-Year Rule and the Beneficiaries Who Escape It
For IRA owners who died after December 31, 2019, the SECURE Act generally requires the inherited account to be emptied by the end of the tenth calendar year after the year of death.6Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs This applies to both conduit and accumulation trusts when the beneficiaries do not qualify for an exception.
Whether the trustee must also take annual withdrawals during years one through nine depends on when the owner died. If death occurred before the required beginning date, the trustee has flexibility—any amount, any year, so long as the account is empty by the end of year ten. If death occurred on or after the required beginning date, annual minimum distributions continue each year, with the balance due by the end of year ten.7Internal Revenue Service. Notice 2024-35 – Certain Required Minimum Distributions
A narrow group of “eligible designated beneficiaries” can still stretch distributions over their own life expectancy:8Internal Revenue Service. Retirement Topics – Beneficiary
- A surviving spouse.
- A minor child of the IRA owner (the 10-year clock starts once the child turns 21).
- A disabled individual, as defined by federal tax law.
- A chronically ill individual.
- A person not more than 10 years younger than the IRA owner.
If the trust is drafted so that only an eligible designated beneficiary can receive distributions, life expectancy payouts remain available. A trust for the sole benefit of a disabled child, for example, can stretch payments over that child’s life. When a trust has multiple beneficiaries and only some qualify, separate subtrusts—one per beneficiary—let the eligible ones use the longer schedule while the others follow the 10-year rule.
The Tax Cost of Keeping Money in the Trust
Trust income tax brackets are compressed. In 2026, a trust hits the top federal rate of 37 percent once taxable income exceeds $16,000.9IRS.gov. 2026 Form 1041-ES Estimated Income Tax for Estates and Trusts A single individual doesn’t reach that same rate until taxable income exceeds $640,600.10Fidelity. Federal Income Tax and Trust Strategies – Trusts and Taxes The full 2026 trust brackets:
- 10% on the first $3,300 of taxable income.
- 24% on income from $3,301 to $11,700.
- 35% on income from $11,701 to $16,000.
- 37% on income over $16,000.
An accumulation trust that keeps a $50,000 IRA distribution will owe substantially more federal tax than an individual who receives the same amount. Conduit trusts sidestep the problem because the distribution is taxed on the beneficiary’s return. Accumulation trusts can also sidestep it in a given year if the trustee distributes the income to beneficiaries during the same tax year.9IRS.gov. 2026 Form 1041-ES Estimated Income Tax for Estates and Trusts
Roth IRAs Change the Calculation
Inherited Roth IRAs are still subject to the 10-year rule for qualifying trusts.8Internal Revenue Service. Retirement Topics – Beneficiary But qualified Roth distributions are generally tax-free, so the compressed-bracket problem disappears: an accumulation trust can hold Roth distributions without generating trust-level income tax. If you have both account types and want to use a trust, routing Roth assets through the trust and leaving traditional IRA assets directly to individuals (where the other reasons for a trust don’t apply) is often the more efficient split.
How Asset Protection Actually Works Here
A trust with a spendthrift provision generally shields inherited IRA assets from a beneficiary’s creditors, divorces, and bankruptcy while the funds remain in the trust. With a conduit trust, that protection ends the moment the trustee pays out the required distribution—the money in the beneficiary’s hands is no longer trust property. An accumulation trust holds protection longer because the trustee can keep funds inside.
The protection can collapse if the beneficiary is also the sole trustee with broad discretion over distributions to themselves. Many state courts have treated that arrangement as effectively unrestricted access, defeating the spendthrift clause. Limiting the trustee-beneficiary’s distribution power to an ascertainable standard, or naming an independent co-trustee, keeps the protection intact. State law governs the details, so the trust should be drafted with the controlling state’s rules in mind.
How to Name a Trust as Your IRA Beneficiary
The change itself is a form, not a court filing. Ask your IRA custodian for a beneficiary designation form. You will provide the trust’s full legal name as written in the trust document, the date the trust was created, and the trust’s Employer Identification Number. A trust that will hold IRA distributions and file returns generally needs its own EIN, available at no cost through the IRS.11Internal Revenue Service. Instructions for Form SS-4 You will also list the current trustees and their addresses.
Most large custodians accept the form online; certified mail with return receipt works if you want a paper record. After the custodian processes the change, keep the written confirmation with the trust document. The custodian’s beneficiary designation controls where the IRA goes at death, not your will. Review it after major life events and after any amendment to the trust, so an outdated form doesn’t override current intentions.
What the Trustee Will Have to Do
When the IRA owner dies, the trustee notifies the custodian, provides a certified death certificate, and delivers a copy of the trust instrument to the custodian by October 31 of the year following the death to preserve see-through status.1eCFR. 26 CFR 1.401(a)(9)-4 – Determination of the Designated Beneficiary From there the trustee calculates and takes each year’s required distribution under whichever rule applies—10-year, life expectancy for an eligible designated beneficiary, or the five-year rule if see-through status was lost.12Internal Revenue Service. Distributions From Individual Retirement Arrangements (IRAs) The trustee also files Form 1041 for the trust each year it has taxable income and issues Schedule K-1s to beneficiaries who receive distributions.
The mechanics reward professional help. Between the compressed brackets, the annual distribution math, and the drafting choices that determine whether a trust qualifies as see-through in the first place, this is a place where a tax adviser or estate attorney pays for itself well before the account is emptied.