Life and Death Planning for Retirement Benefits

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56 Life and Death Planning for Retirement Benefits
lifetime distribution rules apply through the year of death); minus what he actually did take
in that year. “Thus, a required minimum distribution, determined as if the employee had
lived throughout that year, is required for the year of the employee’s death and that amount
must be distributed to a beneficiary to the extent it has not already been distributed to the
employee.” Reg. A-4(a). The beneficiary owns the account once the
participant dies, and the participant’s estate has no right to take any distribution from it
(unless the estate is the beneficiary). See PLR 1999-30052, paragraph [4]. For the effect of
a qualified disclaimer on the year-of-death RMD, see For who takes the year-of-
death RMD if there are: multiple beneficiaries with respect to one plan or IRA, see
A); or with respect to multiple IRAs payable to one beneficiary or to different
beneficiaries, see
B. Surviving spouse is sole beneficiary. If the participant died on or after his RBD, leaving
his benefits to his surviving spouse as sole beneficiary, the ADP is the surviving spouse’s
life expectancy, or what would have been the life expectancy of the deceased participant,
whichever is longer. Reg A-5(a)(1). See for meaning of “spouse
is sole beneficiary.” See D) for how to calculate annual distributions over the
spouse’s life expectancy. Se for when distributions to the spouse must commence.
See for how to calculate RMDs based on what would have been the participant’s
life expectancy and when such distributions must commence. See 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happens if the spouse, having survived the participant, dies before having withdrawn all of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 ee 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. 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 for how
to calculate RMDs using what would have been the participant’s life expectancy and when
such distributions must commence. See 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
, the ADP is the life expectancy of the oldest beneficiary of the trust, or (if greater)
the life expectancy of the deceased participant. Reg 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 D) for how to calculate annual distributions over the spouse’s life
expectancy and for when distributions to the trust must commence. See
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 (this method
applies even if the spouse is the oldest of the multiple individual beneficiaries) and when