Hello! I am wondering about the effect of the changes in the Pension Protection Act of 2006. If a person is already deceased but the IRA has not yet been distributed to the non-spousal beneficiary, my reading of the law indicates that the beneficiary could elect to take the distribution under the old law prior to 12/31/2006, or could roll it over into his or her own IRA, etc. if the distribution is taken after 12/31/2006. Is that correct?

Also, I am not clear on how the new law impacts the required distributions - media reports state that under the new law the distributions will be based on the age of the deceased, rather than the age of the beneficiary (which I think is the case under the existing law).

Finally, I am told by the financial planner who set up the IRA originally that the distributions must be taken by the non-spousal beneficiaries within 5 years. Is that true, and does it change under the new law? Thanks for any and all advice! JWIRA

If I understand your situation correctly, the new law didn't change anything. The new law just allows non-spouse beneficiaries to establish an inherited IRA for a qualified plan distribution. A non-spouse beneficiary can not do a rollover into his or her own IRA under new or old law.

The general rule for death before the owner's required beginning date is that distributions must either begin by the end of the year following death, over the beneficiary's life expectancy, or must be taken out completely within 5 years. I think that fits the situation you're describing.

Hi! So if I understand corrrectly, the beneficiary can decide whether to take distributions over the beneficiary's life expectancy, or can take all of the IRA over the 5 year period. Does anyone know a link to materials that explain the 5 year rule more? I have checked the IRS website, and didn't find much.... Thanks! JWIRA

try IRS pub 590 at www.irs.gov tab retirement benefits