Naming Spousal Solo 401k Beneficiary Vs Naming Spousal IRA Beneficiary

Under the 401k including the solo 401k beneficiary rules the spouse of the account holder is the primary beneficiary by default.  This is true even if you failed to complete a formal beneficiary election form to name your spouse as the beneficiary of the 401k. Therefore, if you do not want to name your spouse as your solo 401k plan’s beneficiary, make sure to complete the beneficiary election form to get your spouse’s written consent as he or she will need to formally opt out.

Rules are Different for an IRA

While the IRS rules don’t require  your spouse to be the named IRA beneficiary, community property rules come into play if you are married and live in a community property state. Therefore, it is best to formally name IRA beneficiaries by completing the IRA custodians IRA beneficiary election form and electing spousal consent if you wish to name someone other than your spouse as the primary beneficiary of the IRA.

Community Property States

Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and
Washington. Wisconsin’s Marital Property Act is based on key community property principles. Alaska also
has adopted community property laws, but the married couple must make a specific election to have these laws apply.

Cleary List the Beneficiaries

Whether naming a beneficiary of your solo 401k or IRA, make sure to clearly document the beneficiaries–both the primary and the contingent. It is best to clearly list the name, address, birth date, and Social Security number of any named beneficiary, and list the percentage of solo 401k or IRA assets that should go to each beneficiary. While not listing the full social security number of date of birth on the beneficiary election form won’t invalidate the beneficiary election, it will make it more challenging to perform the necessary IRS reporting once beneficiary distributions commence.

Contingent Beneficiary (Secondary Beneficiary): Come into play if the primary beneficiary passed away prior to the solo 401k or IRA owner.

Contribute to Both a Nonqualified Deferred compensation Plan (NQDC) and a Self-Directed Solo 401k

Yes, it is possible to contribute to both a 401k plan including a self-employed solo 401k and a nonqualified deferred compensation plan. Often times, a a nonqualified deferred compensation plan is used to help supplement a high earners retirement planning.

1) Having a Nonqualified Deferred compensation Plan (NQDC) will not prevent one from setting up a Solo 401k (if one is otherwise eligible to do so).

2) While we don’t offer non-qualified plans, to our knowledge contributions to such a plan won’t reduce one’s ability to make contributions to a Solo 401k since they are not tax deductible.

Items to Consider

Since contributions to a solo 401k are tax deductible and Roth solo 401k funds also grow tax free, one may consider first contributing to a solo 401k as contributions to a Nonqualified Deferred compensation Plan (NQDC) are neither tax deductible nor are distributions tax free once distributions commence.

Can my personal shares in my ROBS Business be issued to my spouse?

Rollover as Business Startup FAQ- Can my personal shares in my ROBS Business be issued to my spouse?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

ROBS 401k FAQ:  Can I have some of the personal shares issued to my spouse?

My spouse and I are using a ROBS 401K business financing plan to start a realtor business.  While all of the retirement funds will be from my former employer 401k, can the shares issued on account of the non-retirement funds be issued solely to my spouse?

RESPONSE:

Yes – all of the shares issued on account of the non-retirement funds can be issued to whomever you designate (you, your spouse, or someone else).

Do I make solo 401k loan payments to myself?

Self-Employed Solo 401k Question Answered – Do I make solo 401k loan payments to myself?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

Solo 401k FAQ: If I take a loan from my solo 401(k) the interest on paying myself, correct? Not paying it to someone other institution, right?

RESPONSE:

When a Solo 401k owner takes a Solo 401k loan, the Solo 401k owner is certainly not paying it to another institution or to us as the Solo 401k plan provider.

Instead, the loan payments are deposited into the Solo 401k account so the Solo 401k owner is paying the loan back to such person’s retirement account (i.e. the Solo 401k owner’s “future self”).

See more regarding Solo 401k loans.

What name should I use for my Self-Employed Solo 401k?

Solo 401k Question Answered – What name should I use for my Self-Employed Solo 401k?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

Solo 401k FAQ – Is there any advice on naming the Solo 401k plan? Does the name of the plan need to include my name? Is there any benefit in obscuring the name of the Solo 401k owner/trustee?

RESPONSE:

Great question!

Our Solo 401k online application asks 10 simple questions and takes just a minute to complete.  We prepare the documents within the same day or 24 business hours.

The last question asks for the name that you wish to assign to the Solo 401k plan.

It is best to use two words and the word “Trust” (e.g. “Main Street Trust”).

Your may also include the word “retirement” in the name.

For example, “Main Street Retirement Trust”

Also, if your business name contains the words “investment”, “land”, living” or “family”, then make sure to include the words “Retirement Trust” when naming the solo 401k plan.

While technically it is acceptable to use your name in the name of the solo 401k plan, it is certainly not required and most clients find that they don’t want to use their name for privacy purposes. 

For example, one of the top reasons that clients sign up with us the ability to use our Solo 401k plan to invest in alternative investments such as real estate.

Many clients would not want tenants of the Solo 401k real estate to make a direct connection between the Solo 401k rental real estate property and the Solo 401k owner personally.

Ultimately, it is acceptable to use any two words such as a derivation of the self-employed business if there is a formal legal entity or could be something totally different (e.g. favorite color such as “Blue Holdings Trust” or favorite mascot “Wolverine Asset Trust”).

Can my ROBS 401k shares be issued to my spouse?

Rollover as Business Startup FAQ – Can my ROBS 401k shares be issued to my spouse?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

ROBS 401k FAQ:  Can I have some of the 401k shares issued to my spouse?

My spouse and I are using a ROBS 401K business financing plan to start a realtor business.  While we will both invest funds, all of the retirement funds will be from my former employer 401k.  Can the shares issued on account of the retirement funds be issued evenly to my spouse and me?

RESPONSE:

No – all of the shares issued on account of the retirement funds that you invest must be issued to the 401k for your benefit.

How Much Should I Invest in my ROBS funded business?

ROBS 401K Business Financing Plan FAQ – How Much Should I Invest in my ROBS funded business?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

ROBS 401k FAQ: When do I need to decide how much I will invest?

QUESTION: I am using a ROBS 401k Business Financing plan to buy a FedEx route.  I know that stock will be issued based on the amount of non-retirement and retirement funds I will invest.  I am not sure of the exact amount that I will invest – When do we determine exact proportional ownership?   

RESPONSE:

When the 401k funds have been invested in the business, we will ask for the “final numbers” (i.e. retirement and non-retirement funds invested), and based on your response we will prepare stock certificates accordingly.  At that time, you can give us the total amounts including the amount of non-retirement funds used to pay for business expenses such as our fee.

Should my ROBS C corp hold real estate in a separate LLC?

Rollover as Business Startup FAQ – Should my ROBS C corp hold real estate in a separate LLC?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

ROBS 401k FAQ: Holding real estate in a separate LLC

QUESTION:

To help with taxes, it’s been suggested that the property I purchase be in an LLC and then the C-corp can pay rent to the LLC. Is that allowed?

RESPONSE:

From a ROBS 401K perspective, the property may be held in an LLC that is 100% owned by the C-corp (which means that the LLC can’t be taxed as an S-corp because an S-corp can’t be owned by a C-corp).  You will need to discuss with your tax advisor whether having the real estate held in a 100% sub LLC of the C-corp will eliminate any tax benefit.

Can I pay ROBS Setup Fee with retirement funds?

ROBS 401K Business Financing Question Answered – Can I pay ROBS Setup Fee with retirement funds?

Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily FAQs.

ROBS 401k FAQ: Can I pay ROBS Setup Fee with retirement funds?

QUESTION: I am considering using a ROBS 401k Business Financing plan to start a fitness franchise business with my retirement funds.  Can I use some of the funds that I will rollover from my former employer 401k to pay the ROBS setup fee?

RESPONSE:

No – per the 401k business financing rules, you can’t use retirement funds to pay the cost to setup the ROBS 401k plan.  Instead, you would pay the fee with non-retirement funds and this amount will count as part of your personal investment for which you will receive stock personally.

  •  

  • Popular Video

  • ROBS 401k Funding Process

  • Solo 401k Contributions Including Mega

  • Checkbook IRA LLC

  • About MySolo401k

    We help our clients take control of their retirement money. Our products and services provide our clients the freedom to invest their retirement savings in their own business as well as alternative investments such as real estate, private companies, promissory notes, precious metals, tax liens and equities.
    Learn more

    Connect with us

  • We’re here to help.

    Call: 800-489-7571

    Monday-Friday

    8:00 am - 4:00 pm PT

    Why us?
MENU