Conduit trust
See-through trust for IRAs: requires retirement distributions paid out to beneficiaries within a short window. Easier SECURE Act compliance; less accumulation inside trust.
| Facet | Detail |
|---|---|
| Also called | See-through conduit trust, IRA conduit trust |
| A-B / A-B-C role | None — retirement beneficiary planning |
| When created | Often testamentary; may be standalone |
| Revocable | No once funded / named beneficiary |
| Inter vivos / testamentary | Either |
| Typical beneficiaries | Individuals behind the trust (must be identifiable) |
| Primary purpose | Stretch/control IRA with spendthrift layer |
| Marital deduction | No |
| Uses estate exclusion | IRA included in estate if estate is beneficiary — avoid |
| In survivor's estate | No for non-spouse conduit |
| Basis step-up | N/A for pre-tax IRA; Roth step-up in estate |
| Income tax | Pass-through of IRA taxable distributions; 1041 may be informational |
| Crummey powers | No |
| GST / dynasty | SECURE 10-year rule for most non-spouse beneficiaries |
| Spendthrift | Yes — reason to use trust vs outright |
| See-through (IRA) | Yes — designed for this |
| Key tradeoff | Creditor protection vs strict IRS drafting and 10-year payout rules |