Life and Death Planning for Retirement Benefits

Chapter 1: The Minimum Distribution Rules

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See-through trust

¶ 1.5.03 (D)

¶ 1.5.04 (D)

Participant’s estate; a non- see-through trust; any nonindividual beneficiary.

¶ 1.5.03 (E); 5-year rule applies ( ¶ 1.5.06 )

¶ 1.5.04 (E); life expectancy of participant ( ¶ 1.5.08 )

Multiple beneficiaries

¶ 1.5.03 (F)

¶ 1.5.04 (F)

1.5.03 Road Map, cont.: RMDs in case of death BEFORE the RBD To determine required distributions for retirement benefits of a participant who died before his RBD, first complete the steps at ¶ 1.5.02 . Then read this ¶ 1.5.03 . First read the general comments and caveats, and paragraph A. Then read the particular paragraph (B–F) that describes the beneficiary. See ¶ 1.5.02 , Step 3, for explanation of the RBD. General Comments and Caveats Post-death RMDs from a Roth IRA are always determined using rules in this ¶ 1.5.03 (never ¶ 1.5.04 ). Reg. § 1.408A-6 , A-14(b). In all cases, see ¶ 1.5.10 for the ability of the plan to require faster distribution of the benefits than the RMD rules would require. See ¶ 3.2 regarding the ability of the participant’s surviving spouse to roll benefits over to her own IRA (or elect to treat an inherited IRA as her own); such a rollover or election would change the RMD rules applicable to the rolled over benefits; see ¶ 1.6.03 (A), (B), for RMD effects. A. RMD for year of death (regardless of who is beneficiary). Because the participant died before his RBD, there is no RMD for the year of his death. See ¶ 1.4.07 (C). Required distributions will begin, at the earliest, the year after the year of the participant’s death. B. Surviving spouse is sole beneficiary. If the participant died before his RBD, leaving his benefits to his surviving spouse as sole beneficiary, the ADP is the surviving spouse’s life expectancy, unless the 5-year rule applies. Reg. § 1.401(a)(9)-3 , A-1(a). See ¶ 1.5.07 for how to determine whether the 5-year rule applies; see ¶ 1.5.06 for how to calculate distributions under the 5-year rule. See ¶ 1.6.02 for meaning of “spouse is sole beneficiary.” See ¶ 1.6.03 for how to calculate RMDs based on the spouse’s life expectancy. See ¶ 1.6.04 for when distributions to the spouse must commence (Required Commencement Date). See ¶ 1.5.12 and ¶ 1.6.05 for what happens if the spouse, having survived the participant, dies before that Required Commencement Date. See ¶ 1.5.12 and ¶ 1.6.03 (E) for what happens if the spouse, having survived the participant and lived beyond her Required Commencement Date, dies before having withdrawn all of the benefits. See ¶ 3.2 for the surviving spouse’s ability to roll over the inherited benefits to another retirement plan; see ¶ 1.6.03 (A), (B), for RMD effects of such a rollover.

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