Life and Death Planning for Retirement Benefits

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Life and Death Planning for Retirement Benefits

C. Individual beneficiary who is not the surviving spouse. If the participant died before his RBD, leaving his benefits to one individual beneficiary who is not the participant’s surviving spouse, the ADP is the beneficiary’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, ¶ 1.5.06 for how to calculate distributions under the 5-year rule. 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 See ¶ 1.5.12 – ¶ 1.5.13 , for what happens if the beneficiary, having survived the participant, dies before having withdrawn all of the benefits.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 before his RBD, leaving his benefits to a trust that qualifies as a “see-through trust” under the minimum distribution trust rules (see ¶ 6.2.03 ), then the individual beneficiary(ies) of the trust is (or are) treated (for most but not al l purposes) as the participant’s Designated Beneficiary(ies). If the sole beneficiary of the trust is the participant’s surviving spouse, the ADP is the spouse’s life expectancy (see ¶ 1.6.03 (D) for how to calculate RMDs, ¶ 1.6.04 for when distributions to the trust must commence) unless the 5-year rule applies. 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, the ADP is the life expectancy of the oldest (or sole) trust beneficiary unless the 5-year rule applies. Reg. § 1.401(a)(9)-3, A-1(a) , § 1.401(a)(9)-5 , A- 7(a)(1). See ¶ 1.5.05 for how to calculate annual distributions over the life expectancy of a nonspouse individual beneficiary (this method applies even if the spouse is the oldest of the multiple individual beneficiaries) and when such distributions must commence. See ¶ 1.5.07 for how to determine whether the 5-year rule applies and ¶ 1.5.06 for how to calculate distributions under the 5-year rule. E. Estate, non-see-through trust, or other nonindividual beneficiary. If the participant died before 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 in case of death before the RBD is the 5-year rule. Reg. § 1.401(a)(9)-3 , A-4(a)(2). See ¶ 1.5.06 for how to calculate distributions under the 5-year rule. F. Multiple beneficiaries. If the participant died before his RBD, leaving his benefits to multiple beneficiaries, first determine whether the separate accounts rule applies for ADP purposes; see ¶ 1.8.01 (B). If the separate accounts rule does apply for ADP purposes, determine the ADP for each separate account using the rules in these subparagraphs B–F based on the beneficiary(ies) of such separate account. If there are multiple beneficiaries whose interests do not constitute separate accounts for ADP purposes, then two special rules apply. First, unless all of the beneficiaries are individuals or see-through trusts ( ¶ 6.2.03 ), the participant is deemed to have “no Designated Beneficiary” and RMDs are determined under the 5-year rule; see ¶ 1.7.05 (A) and see “E” above. Second, if all of the beneficiaries are individuals (or see-through trusts; ¶ 6.2.03 ), the ADP is either the life expectancy of the oldest Designated Beneficiary (Reg. § 1.401(a)(9)-5 , A-7(a)(1)) or the