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Self-directed 401k – What does it mean if my spouse is the Co-Trustee of my Solo 401k?
If I specify my spouse as the co-trustee but not yet a participant in the plan, what does that mean?
RESPONSE:
Listing the spouse as a Co-Trustee on our Solo 401k application will result in the spouse being listed on the plan documents as a trustee.
Since the spouse is listed on the documents as a trustee, if and when your spouse is working in the self-employed business and wishes to participate in the plan no changes will need to be made to the Solo 401k establishment documents and it’ll just be a matter of opening an account(s) in the name of the Solo 401k for the benefit of the spouse.
In addition, by listing the spouse as a co-trustee if the solo 401k owner/participant predeceases the spouse, it will make it easy for your spouse to take over the account.
It means that the spouse now has signing authority – for example, if the solo 401k owner/participant is not able to sign on behalf of the Solo 401k for a particular investment the spouse who is a Co-Trustee may sign on behalf of the plan to make an investment.
It is noteworthy that the spouse does not need to be an owner of the company, nor does the spouse need to be reporting self-employment income, in order to be eligible to serve as a Co-trustee of the Solo 401k.
