Qualified Trust

What is ‘Qualified Trust’

A tax-advantaged fiduciary relationship between an employer and an employee in the form of a stock bonus, pension, or profit-sharing plan in which the underlying beneficiary may use his or her life expectancy to determine required minimum distribution amounts. Section 401(a) of the Internal Revenue Code authorizes and sets forth the requirements for a qualified trust.

Explaining ‘Qualified Trust’

To be qualified, a trust must be valid under state law, must be irrevocable (or become irrevocable when the retirement account holder dies) and must have identifiable beneficiaries. Furthermore, the IRA trustee, custodian or plan administrator must be provided with a copy of the trust instrument. If a qualified trust is not structured correctly, disbursements will be taxable.

Further Reading

  • Social trust and foreign ownership: Evidence from qualified foreign institutional investors in China – www.sciencedirect.com [PDF]
  • Trust, accountability, and face-to-face interaction in North–South NGO relations – www.tandfonline.com [PDF]
  • Using experimental economics to measure social capital and predict financial decisions – www.aeaweb.org [PDF]
  • Emerging teachers–emerging identities: trust and accountability in the construction of newly qualified teachers in Norway, Germany, and England – www.tandfonline.com [PDF]
  • Lost trust: The real cause of the financial meltdown – www.jstor.org [PDF]
  • Overlapping financial investor ownership, market power, and antitrust enforcement: My qualified agreement with Professor Elhauge – heinonline.org [PDF]
  • Method for defining Qualified Direct Cost – patents.google.com [PDF]
  • Preparedness for practice: A longitudinal qualitative study of newly qualified nurses, trust stakeholders and educationalists – uwe-repository.worktribe.com [PDF]