Life and Death Planning for Retirement Benefits

Chapter 1: The Minimum Distribution Rules

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whichever is longer. Reg. § 1.401(a)(9)-5 , A-5(a)(1). See ¶ 1.6.02 for meaning of “spouse is sole beneficiary.” See ¶ 1.6.03 (D) for how to calculate annual distributions over the spouse’s life expectancy. See ¶ 1.6.04 for when distributions to the spouse must commence. See ¶ 1.5.08 for how to calculate RMDs based on what would have been the participant’s life expectancy and when such distributions must commence. See ¶ 1.6.03 (E) for what happens if the spouse, having survived the participant, dies before having withdrawn all of the benefits. The surviving spouse can also roll over the inherited benefits to another retirement plan; see ¶ 3.2 . See ¶ 1.6.03 (A), (B), for RMD effects of such a rollover. C. Individual beneficiary who is not the surviving spouse. If the participant died on or after his RBD, leaving his benefits to one individual beneficiary who is not the participant’s surviving spouse, the ADP is the individual beneficiary’s life expectancy, or (if greater) the life expectancy of the deceased participant. Reg. § 1.401(a)(9)-5 , A-5(a)(1). See ¶ 1.5.05 for how to calculate annual distributions over the life expectancy of a nonspouse individual beneficiary and when such distributions must commence. See ¶ 1.5.08 for how to calculate RMDs using what would have been the participant’s life expectancy and when such distributions must commence. See ¶ 1.5.12 – ¶ 1.5.13 for what happens if the beneficiary, having survived the participant, dies before having withdrawn all of the benefits. D. See-through trust. If the participant died on or after his RBD, leaving his benefits to a trust that qualifies as a “see-through trust” under the IRS’s minimum distribution trust rules ( ¶ 6.2.03 ), the ADP is the life expectancy of the oldest beneficiary of the trust, or (if greater) the life expectancy of the deceased participant. Reg. § 1.401(a)(9)-5 , A-5(a)(1), A-7(a)(1), § 1.409(a)(9)-4 , A-5. If the sole beneficiary of the trust is the participant’s surviving spouse, see ¶ 1.6.03 (D) for how to calculate annual distributions over the spouse’s life expectancy and ¶ 1.6.04 for when distributions to the trust must commence. See ¶ 1.6.06 for how to determine whether the spouse is considered the “sole beneficiary” of the trust. If the spouse is not the sole beneficiary of the trust, see ¶ 1.5.05 for how to calculate annual distributions over life expectancy of a nonspouse individual beneficiary (even if the spouse is the oldest of the multiple individual beneficiaries) and when such distributions must commence. See ¶ 1.5.08 for how to compute RMDs based on what would have been the participant’s life expectancy and when such distributions must commence. E. Estate, non-see-through trust, or other nonindividual beneficiary. If the participant died on or after his RBD, leaving his benefits to his estate ( ¶ 1.7.04 ) or other nonindividual beneficiary, including a trust that does not qualify as a “see-through trust” ( ¶ 6.2.03 ), then the participant has “no Designated Beneficiary,” and the no-DB rule applies. Reg. § 1.401(a)(9)-4 , A-3. The “no-DB rule” that applies in the case of death after the RBD is that the ADP is what would have been the participant’s remaining life expectancy. Reg. § 1.401(a)(9)-5 , A-5(a)(2). See ¶ 1.5.08 for how to compute RMDs based on what would have been the participant’s life expectancy and when such distributions must commence.