Naming a Trust as Beneficiary of a Solo 401k

Naming a Trust as Primary Beneficiary of the Solo 401k Plan

While most solo 401k plan owners/participants name their spouse or children as the primary beneficiary or their solo 401k plan, many also name their trust as the beneficiary on the solo 401k beneficiary election form. If the trust is listed as the beneficiary of the solo 401k plan,the beneficiaries of the named trust can be your children, grandchild, spouse or another individual that you want to receive the solo 401k plan. 

More Complex 

It is easier to name a person instead of a trust as the beneficiary of the solo 401k plan. All you need to do is list the individual(s) on the solo 401k beneficiary election form. Whereas naming a trust as the beneficiary will  take time and require consulting with an attorney well versed in in both retirement plan rules and trusts.

 Common Reasons for Naming a Trust as the Primary Beneficiary of a Solo 401k Plan

MINOR: If your child or grandson is a minor, she is not going to be able to make tax or investments decisions. 

MULTIPLE MARRIAGES: You may not want to leave your second husband the solo 401k income. Once he passes away, the trust can call for the remaining funds to flow to your children or grandchildren. 

To learn more about naming a trust as the beneficiary of a solo 401k plan,VISIT HERE.