Life and Death Planning for Retirement Benefits

153 / 507

Chapter 3: Marital Matters 153
eliminated (via distribution or disclaimer, for example) by September 30 of the year after
the year of the participant’s death (the “Beneficiary Finalization Date”; see , the
spouse would be considered the sole beneficiary for minimum distribution purposes and
options B and C above would also be available.
Similarly, if the surviving spouse is not the sole beneficiary as of the date of death, but is
one of multiple beneficiaries who have fractional or percentage shares, and the inherited account
is divided into separate “inherited accounts” payable to the respective multiple beneficiaries no
later than December 31 of the year after the year of the participant’s death, the spouse would be
considered the sole beneficiary of the separate account payable to her for minimum distribution
purposes, and Options B and C would be available; see
If the surviving spouse is just one of multiple beneficiaries as of the Beneficiary
Finalization Date, and the separate accounts rule does not apply, see F) o F) for
how to compute RMDs.
E. If benefits are payable to an estate or trust of which the spouse is a beneficiary. See
regarding availability of the spousal rollover. If the benefits are not rolled over by
the surviving spouse “through” the estate or trust as described at use the Road
Map at to compute RMDs.
F. Spousal Roth conversion. The surviving spouse has the option to convert inherited
benefits to a Roth IRA. See
G. If the surviving spouse-beneficiary dies after the participant. If the participant dies
leaving benefits to the surviving spouse, and then the surviving spouse also dies, see
for the effect of simultaneous deaths clauses for the ability of the surviving
spouse’s executor to disclaim benefits on her behalf an for the extent (if
any) to which the surviving spouse’s executor can exercise the now-deceased surviving
spouse’s rollover and election rights; and E) or C) regarding RMDs in
the year of the surviving spouse’s death and thereafter.
H. Other pitfalls and considerations. If the participant died before his Required Beginning
Date be aware of the deadline the spouse may face regarding electing between the
life expectancy payout method and the 5-year rule; see last paragraph. If the
surviving spouse inherits, in 2010 or 2011, a Roth IRA that was created by a 2010
conversion, se
3.1.03 Simultaneous death clauses
If the participant names his spouse as beneficiary, and they die simultaneously or within a
short time of each other, it may be presumed under applicable state law or under the plan
documents that the spouse predeceased the participant; se A presumption that the spouse
survived the participant, if contained in the participant’s will or trust, will NOT govern retirement
benefits payable directly to the spouse. To be effective, the presumption would have to be
contained in the designation of beneficiary form; see Such a presumption may be used,
if the spouse’s estate is smaller than the participant’s, to equalize the estates for estate tax purposes.