See-Through Trust for an IRA: Does Your Trust Qualify?

By Eric Ridley, attorney, Ridley Law. Updated October 2026.

If your trust is named as the beneficiary of your IRA, or you’re the trustee of one that was, the question is whether the trust passes the see-through test. It decides how fast the money has to come out of the account, and who pays tax on it when it does. The rules are in the Treasury’s final required minimum distribution regulations, T.D. 10001 (89 Fed. Reg. 58886, July 19, 2024), which apply to distribution years beginning on or after January 1, 2025. For the beneficiary’s side of the same rules, see the inherited IRA tax map and the 10-year rule for inherited IRAs.

What a trust costs when it holds the IRA

Take a hypothetical $1,000,000 traditional IRA left to a trust for an adult child. Under the 10-year rule the account has to be emptied by the end of the tenth year after the owner’s death. If the trustee takes $100,000 out in a year and the trust keeps it, the trust is taxed on that income at the 2026 trust rates, which reach 37% above $16,000 of taxable income. For a single filer the 37% bracket starts above $640,600, and for a joint return above $768,700. The federal tax on $100,000 of taxable income comes to $34,931 for the trust, $16,712 for a single filer and $11,504 for a married couple filing jointly (Rev. Proc. 2025-32). The figures are federal only and before any deductions.

Keeping IRA money inside a trust costs that difference. It can be worth paying for a child who can’t manage money or a beneficiary with special needs, and it isn’t worth paying by accident. Income a trust pays out to a beneficiary in the same year generally moves onto the beneficiary’s return, up to the trust’s distributable net income, because the trust takes a deduction and the beneficiary reports the income (IRC §§ 661(a), 662(a)). Whether the trust keeps or passes out the income is a drafting choice made years before anyone takes a dollar out, and the rest of this page covers how to make it on purpose.

How the IRS reads through a trust

A trust named as beneficiary gets no credit for being a trust, because only an individual can be a designated beneficiary. A person that isn’t an individual, such as the owner’s estate, is not a designated beneficiary, and if one is named the owner is treated as having none (Treas. Reg. § 1.401(a)(9)-4(b)). The see-through rules are the exception. If a trust named as beneficiary meets the requirements, certain beneficiaries of the trust, and not the trust itself, are treated as the owner’s designated beneficiaries (§ 1.401(a)(9)-4(f)(1)(i)). The same rules apply to IRAs, with the IRA custodian standing in for the plan administrator (§ 1.408-8(a)(3)).

The test is short, and one part of it has a date. For any period in which payouts are figured by looking through the trust to its beneficiaries, the trust has to be valid, be irrevocable at the owner’s death, have identifiable beneficiaries and satisfy the documentation rule (§ 1.401(a)(9)-4(f)(2)). A revocable living trust that becomes irrevocable at the owner’s death clears the irrevocability test without any special language. The documentation rule is where trustees get caught, because it has a deadline.

The documentation requirement is one of the four see-through requirements, and for distribution years after the owner’s death it is met only if the trustee gives the plan administrator the list or the trust copy no later than October 31 of the year after the year of death (Treas. Reg. § 1.401(a)(9)-4(f)(2)(iv), (h)(1)(ii)). The rule has two forms. A trustee can send a final list of every beneficiary as of September 30 of the year after death, including contingent ones, with a description of the conditions on their entitlement and a certification that the list is correct and complete, and then agree to provide the trust instrument on request. Or the trustee can send a copy of the trust document that was in effect at death (§ 1.401(a)(9)-4(h)(3)). The plan administrator decides which of the two it will accept. If the trustee later turns out to have given the custodian information that conflicts with the trust, the plan isn’t penalized if it relied on that information reasonably, but the excise tax is figured on the trust’s actual terms (§ 1.401(a)(9)-4(h)(4)).

Who counts as a beneficiary, and why that sets the clock

The first job is to list everyone who could ever receive IRA money from the trust. The beneficiaries that count are the ones who could receive amounts in the trust that represent the IRA, where the right isn’t contingent on or delayed until another trust beneficiary’s death. In an accumulation trust, they also include whoever could receive amounts that weren’t paid out to the first group (§ 1.401(a)(9)-4(f)(3)(i)). Some people who take only after another beneficiary dies are disregarded, and the rules for that are technical (§ 1.401(a)(9)-4(f)(3)(ii)).

That list drives everything else. The oldest beneficiary who counts sets the payout period (§ 1.401(a)(9)-5(f)(1)), and an eligible designated beneficiary can use the life expectancy payout (unless the plan or IRA agreement provides for the 10-year rule instead, § 1.401(a)(9)-3(c)(5)(ii)) while everyone else is on the 10-year rule. The eligible group is the surviving spouse, a child of the owner who hasn’t reached 21, a disabled person, a chronically ill person, and a person not more than 10 years younger than the owner (§ 1.401(a)(9)-4(e)(1), (e)(3)). If even one beneficiary who counts is outside that group, the owner is treated as having no eligible designated beneficiary (§ 1.401(a)(9)-4(e)(2)(i)). There are two exceptions. A minor child of the owner is an eligible beneficiary even when other beneficiaries aren’t ((e)(2)(ii)), and an applicable multi-beneficiary trust for a disabled or chronically ill person works differently ((e)(2)(iii), (g)).

A trust that looks like it protects a spouse can still end up on the 10-year rule. Take a trust that pays income to the surviving spouse for life, gives the spouse a power to appoint the remainder, and leaves the remainder to the owner’s children if the spouse doesn’t use the power. A power of appointment to people who can’t be identified doesn’t disqualify the trust, but unless the spouse exercises it or restricts it to identifiable people by September 30 of the year after the owner’s death, everyone who takes in default counts (§ 1.401(a)(9)-4(f)(5)(ii)(A)). In the regulation’s own example, the children are not eligible designated beneficiaries, so the trust can’t take the life expectancy payout and the 10-year rule applies (§ 1.401(a)(9)-4(f)(6)(v)). The trust was drafted reasonably. The one step that had a date on it didn’t happen.

Conduit or accumulation: who controls the money after it leaves the IRA

Which of two types your trust is decides who counts as a beneficiary and who controls the money. In a conduit trust, all distributions from the IRA are paid, on receipt by the trustee, directly to or for the benefit of the specified beneficiaries. An accumulation trust is any see-through trust that isn’t a conduit trust (§ 1.401(a)(9)-4(f)(1)(ii)). The difference decides which beneficiaries count. In a conduit trust, people who could take only after the first beneficiary’s lifetime are not treated as the owner’s beneficiaries. In an accumulation trust, the residual beneficiaries generally count, except those who could take only because another residual beneficiary dies (§ 1.401(a)(9)-4(f)(3)(i), (ii), (iii)).

The practical result for an adult child with no special status is stark. Because the child is on the 10-year rule and the conduit trustee has to pass out whatever the IRA pays, the child ends up holding the entire account by the end of the tenth year. The trust’s protective terms apply to nothing the IRA has paid out. An accumulation trust keeps control by letting the trustee hold the money, and pays the tax cost shown earlier. The regulations don’t blur the line. Treasury declined a request to treat a trust as a conduit solely because a beneficiary has a unilateral right to withdraw. If a trust doesn’t require the payout on receipt, the beneficiaries who could benefit from what accumulates count (89 Fed. Reg. 58886, 58894).

Neither type is better. A conduit trust fits a beneficiary who needs management more than protection. An accumulation trust fits a beneficiary who needs the money held back, and the owner should know what that costs in tax. If the trust has a spendthrift provision, California protects a beneficiary’s interest in the trust until it’s paid out (Prob. Code, §§ 15300, 15301), subject to the exceptions in §§ 15304 to 15307, for the beneficiary whose money the trustee holds back. See spendthrift trusts and creditor protection for how those rules work.

When the owner died matters as much as the trust

Whether the trustee owes annual withdrawals while the 10-year clock runs depends on the owner’s required beginning date. For an IRA it is April 1 of the year after the owner reaches the applicable age (§ 1.408-8(b)(1)(i)), and the applicable age is 73 for someone who reaches 72 after 2022 and 73 before 2033, and 75 for someone who reaches 74 after 2032 (IRC § 401(a)(9)(C)(v)). If the owner died before that date, a non-eligible beneficiary has no annual required distributions and only has to empty the account by the end of the year containing the tenth anniversary of death (§ 1.401(a)(9)-3(c)(3)). If the owner died on or after it, annual required distributions continue in every year while the 10-year limit also applies (§ 1.401(a)(9)-5(d)(1)(i), (e)(2)). A Roth IRA owner is treated as having died before the required beginning date (§ 1.408-8(b)(1)(ii)).

The bottom row is the cost of a defective trust. If the owner has no designated beneficiary and died before the required beginning date, distributions must satisfy the five-year rule when the plan has no other election (§ 1.401(a)(9)-3(c)(2), (c)(5)(i)(A)). If the owner died on or after it, the payout runs over the owner’s own remaining life expectancy (§ 1.401(a)(9)-5(d)(1)(iii)). Missing a required distribution costs a 25% excise tax on the shortfall, reduced to 10% if corrected in time (IRC § 4974(a), (e)). For a trust that isn’t divided at the owner’s death, the trust is the payee for that tax (§ 1.401(a)(9)-8(a)(1)(iii)(A)). Notices 2022-53, 2023-54 and 2024-35 waived the tax for certain annual distributions missed in 2021 through 2024, for beneficiaries of owners who died in 2020 through 2023 on or after the required beginning date (89 Fed. Reg. 58886, 58897). That relief ended with 2024. The final regulations apply to calendar years beginning on or after January 1, 2025, so annual distributions are required from 2025.

For a hypothetical owner who dies in 2026 after the required beginning date, leaving the IRA to a trust for an adult child, the first date that matters to the trustee is not the death.

The year-of-death distribution is an easy one to miss. When the owner died on or after the required beginning date, a required distribution is due for the year the owner dies, and it has to go to the beneficiaries to the extent the owner hadn’t already taken it (§ 1.401(a)(9)-5(c)(1)). If the owner hadn’t taken it, the beneficiary has to, and that can be the trust.

A spouse, a young child, or a beneficiary with a disability

The 10-year rule doesn’t apply to everyone, and the exceptions are where planning for a spouse, a young child or a disabled beneficiary pays off. A surviving spouse is an eligible designated beneficiary and so is a minor child of the owner (§ 1.401(a)(9)-4(e)(1)). A minor child’s eligible status ends at 21, and the remaining account must be emptied by the end of the year containing the tenth anniversary of that birthday (§ 1.401(a)(9)-4(e)(3); § 1.401(a)(9)-5(e)(4)). A beneficiary who is disabled or chronically ill can use the life expectancy payout. Documentation of the disability or chronic illness has to reach the plan administrator by October 31 of the year after the owner’s death, and the chronic illness case needs a certification from a licensed health care practitioner (§ 1.401(a)(9)-4(e)(7)).

An applicable multi-beneficiary trust is the regulation’s tool for a trust that serves a disabled or chronically ill person and also names others. It requires more than one beneficiary, all of them designated beneficiaries, trust terms that identify the disabled or chronically ill individuals, and terms under which no one else has any right to the IRA until all of those individuals have died (§ 1.401(a)(9)-4(g)(1)). Only those individuals are counted for the oldest-beneficiary and eligible-beneficiary tests (§ 1.401(a)(9)-5(f)(1)(ii)). If you’re planning for a child who receives benefits, see leaving money to a child on benefits and the California special needs trust guide. The trust language has to be written for both sets of rules.

What changes for a California family

Community property and your spouse’s consent

If the IRA is community property, naming your trust as beneficiary without your spouse’s signed consent doesn’t bind the spouse’s share. An IRA you built during a marriage may be community property, and a nonprobate transfer of community property that you make without your spouse’s written consent isn’t effective as to the spouse’s interest (Prob. Code, § 5020), and an individual retirement plan is one of the instruments the statute covers (Prob. Code, § 5000(a)). Naming your trust as the IRA beneficiary without your spouse’s signed consent can leave the spouse’s share outside your plan. See spousal rights in a 401(k) or IRA.

One trust or separate shares

Whether younger beneficiaries get their own payout clock depends on one drafting choice made before death. A see-through trust with several beneficiaries is generally treated as one unit, and the oldest beneficiary who counts sets the clock. The exception is a trust that is divided into separate see-through trusts immediately at the owner’s death, with no discretion over how post-death distributions are allocated among them. Administrative delays in the split don’t defeat it, as long as the money received in the meantime is allocated as if the split had occurred at death (§ 1.401(a)(9)-8(a)(1)(iii)). A trust that waits to divide until after the administration, or leaves the division to the trustee’s judgment, doesn’t meet that description. That matters when the beneficiaries are on different clocks, such as a spouse and children.

The trustee’s calendar

The IRA deadlines run beside the California notice deadline, and they’re different dates. The trustee of a California trust that became irrevocable has 60 days to serve the beneficiary notification under Prob. Code, § 16061.7(f). The September 30 date fixes who counts, and the October 31 date is the paperwork to the custodian. The successor trustee’s first 90 days covers the rest of that early period.

Reading a trust the way the regulation does comes down to who can receive IRA money, in what order and on what conditions, and whether the paperwork can be done on time. The checklist is short.

• Is the trust irrevocable at death by its own terms, and is it signed and in effect?
• Can every person who could receive IRA money be identified, including takers in default of a power of appointment?
• Is anyone who counts older than the owner’s intended payout assumes, or outside the eligible group?
• Do the trust’s terms require payout on receipt (conduit) or let the trustee hold money back (accumulation), and does the family know the tax difference?
• If the IRA may be community property, does the spouse’s written consent exist?
• Is a split at death needed so younger beneficiaries get their own clock?
• Does the trustee know the September 30 and October 31 dates, and does the custodian accept a list or a copy?

In some families the better answer is to name the children directly, or to write a stand-alone trust for the IRA instead of using the family trust. That’s a drafting choice, and it depends on the beneficiaries. Retirement accounts and beneficiary forms are covered more broadly on retirement accounts and beneficiary planning and the benefits of naming a trust as a beneficiary, and the inherited IRA calculator models the 10-year schedule.

Frequently asked questions

What is a see-through trust?

A see-through trust is a trust that meets the IRS requirements so the beneficiaries of the trust, and not the trust itself, are treated as the designated beneficiaries of an IRA or retirement plan. The trust must be valid under state law, be irrevocable or become irrevocable at the owner’s death, have identifiable beneficiaries, and meet the documentation requirement (Treas. Reg. § 1.401(a)(9)-4(f)(2)).

Does a revocable living trust qualify as a see-through trust?

It can. A revocable living trust that becomes irrevocable at the owner’s death satisfies the irrevocability requirement. Whether it qualifies as a whole depends on its terms, including whether everyone who can receive IRA money is identifiable and whether the trustee delivers the list or a copy of the trust to the custodian by October 31 of the year after death (Treas. Reg. § 1.401(a)(9)-4(f)(2), (h)).

What is the difference between a conduit trust and an accumulation trust?

A conduit trust requires that every IRA distribution the trustee receives be paid straight out to the trust beneficiaries. An accumulation trust is any see-through trust that isn’t a conduit trust, so the trustee may hold distributions inside the trust. In an accumulation trust, the residual beneficiaries generally count as beneficiaries of the owner, and income kept in the trust is taxed at trust rates (Treas. Reg. § 1.401(a)(9)-4(f); IRC §§ 661, 662).

Is the 10-year rule the same for a trust as for a person?

For a trust, the 10-year rule applies when any beneficiary who counts is not an eligible designated beneficiary, with exceptions for a minor child of the owner and for an applicable multi-beneficiary trust. The account must be empty by the end of the year containing the tenth anniversary of death. Annual distributions are also required in years one through nine if the owner died on or after the required beginning date (Treas. Reg. §§ 1.401(a)(9)-3(c), 1.401(a)(9)-5(d)(1), 1.401(a)(9)-5(e)).

When does the trustee have to give the IRA custodian the trust documents?

By October 31 of the calendar year after the year of the owner’s death. The trustee can send either a final list of all beneficiaries as of September 30 of that year, with a certification and an agreement to provide the trust on request, or a copy of the trust document in effect at death. The custodian decides which it accepts (Treas. Reg. § 1.401(a)(9)-4(h)(1)(ii), (h)(3)).

What happens if the trust doesn’t qualify as a see-through trust?

The owner is treated as having no designated beneficiary. If the owner died before the required beginning date, the five-year rule generally applies. If the owner died on or after it, annual distributions run over the owner’s remaining life expectancy, which can be shorter than a beneficiary’s (Treas. Reg. §§ 1.401(a)(9)-3(c)(5)(i)(A), 1.401(a)(9)-5(d)(1)(iii)).

What is the penalty for missing a required distribution from an inherited IRA?

The excise tax is 25% of the amount not distributed, reduced to 10% if the shortfall is corrected within the correction window (IRC § 4974(a), (e)). The IRS may waive the tax for reasonable error if the taxpayer is taking reasonable steps to fix the shortfall (§ 4974(d)). For a trust that isn’t divided at the owner’s death, the trust is the payee for that tax.