Can a Trustee Set Up an IRA for a Beneficiary?
The laws regarding trusts are essentially the same with regards to tax matters, but can vary in the details regarding the administration of trusts and the duties of the trustees, depending on the state where you live. A trustee can't open an IRA account for you in a trust while you are alive because an IRA is a type of trust and does not belong in another revocable trust. The trustee can, however, advise you in opening your own IRA outside your living trust.
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Trusts
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Trusts are legal envelopes into which you deposit assets. You can't put a trust inside another trust, but you can make another trust a beneficiary of your trust in the event of your death. If you and your spouse have a living trust, you can appoint your spouse as successor trustee in the event of your death, or you can appoint one of your children, your attorney or any other suitable person to act as trustee.
Trustee
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A trustee is appointed in your trust to manage the assets of the trust for the beneficiaries. It is common for an individual to create a living trust and appoint himself as trustee. If a person wills that his living trust assets are to be passed on to his beneficiaries as a trust, he will appoint a trustee or make provision in the trust for the selection and appointment of a trustee to oversee the management of the assets left in trust for his beneficiaries.
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IRA Accounts
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An IRA is a type of trust. It shields the assets in the IRA from taxation until they are withdrawn from the IRA account. For this reason, you can't put an IRA into a living trust while you are alive. However, you can name a trust, your family trust for example, as the beneficiary of your IRA in the event of your death. Your trustee for that trust will not need to open a new IRA account because it will not be put into the trust, only the distributions will go into the trust to be distributed to the beneficiaries.
Considerations
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A spouse can roll an inherited IRA into her existing IRA. If you inherit an IRA from someone other than a spouse, you can't roll it into your IRA. You must take distributions from that IRA within a specified number of years depending on how many beneficiaries have inherited a share of the IRA account. Because state inheritance and federal tax rules are complex, ask an accountant or tax attorney how the inheritance of an IRA is treated with respect to your own situation.
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References
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