I would look into opening up BDA IRAs for each beneficiary. Based on the brief excerpt of the trust and whether or not you, as Trustee, are willing to sign off on a letter of indemnity, it may be possible. Then everyone has their own account and you avoid potential trust tax rates if a distribution wraps over from one calendar year to the next. The sister's money could possibly stay in trust while the other's took over their own, but that would be dependent on the trust.
