Will a Special Needs Trust for a disabled person receive the same tax advantages as an individual if specified as the beneficiary of a 401K - ie. the trust receives an annual payout paying taxes on the amount received from the 401K each year from the trust account?
Disabled individual is the beneficiary for both parents and unmarried, childless sibling. Does the relationship affect the planning process? Can everything be handled in a single trust?
Assume the SNT is the beneficiary even if there is no tax advantage. Is the distribution on the death of the owner considered a single event or can it be taken out over a time period specifed by the financial institution? Can the tax paid from the cash in the 401K or must it be paid from other assets? There is only income tax to consider - no estate tax will likely be due.