Life and Death Planning for Retirement Benefits

Chapter 1: The Minimum Distribution Rules

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the participant died before or after his RBD. See ¶ 1.5.06 for the no-DB rule that applies if the participant died before his RBD, ¶ 1.5.08 if the participant died on or after his RBD.

F. Even if the benefits are left to a Designated Beneficiary , the no-DB rule may apply, either as a result of the beneficiary’s election or deemed election (in the case of death before the RBD; see ¶ 1.5.07 ), or because it provides a longer ADP (in the case of death after the RBD; see ¶ 1.5.04 ).

G. The retirement plan in question is not required to offer the longest payout period the law might allow. See ¶ 1.5.10 .

Road Map for determining post-death RMDs

To calculate required minimum distributions (RMDs) after the participant’s death, START HERE and complete Steps 1 through 6. The chart at Step 7 will then tell you how to compute RMDs for your particular beneficiary, decedent, and plan. However, the plan i s not required to allow all the payout options that the tax law permits; see ¶ 1.5.10 . For “double deaths” (the participant died; the beneficiary survived the participant; and then the beneficiary also died, before having withdrawn all of the money in the plan), FIRST determine RMDs applicable on the participant’s death using this ¶ 1.5.02 , plus either ¶ 1.5.03 or ¶ 1.5.04 , whichever is applicable. THEN proceed to what happens on the beneficiary’s later death, using ¶ 1.5.12 AND either:

 ¶ 1.6.03 (E) or ¶ 1.6.05 (C) (whichever is applicable), if the participant’s sole beneficiary was his surviving spouse; or



¶ 1.5.13 if the participant’s surviving spouse is not the sole beneficiary.

Step 1: Gather basic information you will need to complete the rest of the steps:

 The participant’s date of birth and date of death. You can skip the “birth date” part if the plan is a Roth IRA, or if you know the participant was younger than age 70½ at death.

 The identity of the participant’s beneficiary(ies) ( ¶ 1.7.02 ). For an individual beneficiary, you need to know the beneficiary’s date of birth and whether the beneficiary is the surviving spouse of the participant. If the beneficiary is a trust, you need to know whether the trust qualifies as a see-through trust ( ¶ 6.2.03 ), and (if it does so qualify) the birth date of the oldest trust beneficiary.

 The type of plan you are dealing with: traditional IRA, Roth IRA, QRP, or 403(b) plan (see ¶ 8.3 ).

Step 2: Gather specialized information you may need to compute the RMD in some cases:

 If the participant died on or after April 1 of the year after the year in which he reached age 70½, and the plan is a QRP or 403(b) plan, you need to know whether the participant had