Qualified Trust
What Does Qualified Trust Mean?
A qualified trust is a tax-deferred retirement plan arranged by an employer for an employee.
This type of individual retirement account may provide benefits in the form of a pension, stock shares, or profit-sharing, with a required minimum annual withdrawal. For the trust to be considered valid, beneficiaries must also be named.
Insuranceopedia Explains Qualified Trust
Withdrawals from a qualified trust begin after retirement, with the minimum withdrawal amount based on the individual’s average life expectancy. Beneficiaries may lose the tax advantages if they withdraw funds before reaching retirement age.
A qualified trust is irrevocable, and this status remains in effect even after the owner’s death. Therefore, the administration of the trust and its assets for the benefit of the designated beneficiaries is critical.
