Determining Beneficiaries under the final regulations

[ccassetty]

I think I'm pretty clear on how to reduce the pool of possible beneficiaries after the participant's death and prior to the September 30 deadline, what I'm not clear on, is how to determine the pool in the first place.

Example: A participant has died and has named his spouse as primary beneficiary and their children as contingent beneficiaries. Are the children in the pool or not? If the spouse completes a proper disclaimer, will the children or the estate then be the beneficiary?

What if the Grandchildren are named as remaindermen beneficiaries?

Let's say the participant married again to a much younger spouse, who is actually younger than the children of the participant. In the above scenario, if no one disclaims or is paid out prior to September 30, will the age of the spouse be used since he/she is primary beneficiary or will the ages of the children be used since they are older? Same question pre-death for determination of the participant's minimum distribution?

Thanks so much!

Carolyn

[mbozek]

The person whose life is used for determinig the payment of benefits is the designated beneficary. Every plan and IRA provides for the designation of one or more beneficaries. If the spouse is designated as the beneficiary by the participant/IRA owner then the benefits are paid to the spouse. The children would only receive benefits if the spouse predeceased the participant. If the spouse disclaims then the next in line (the children) become the beneficiaries because the spouse is deemed to have predeceased the participant. The life expectancy of the oldest child is used to determine the payment period.

Grandchildren who are remaindermen will only take if all other classes of beneficaries with a higher priority are dead.

Under the distribution regs the age of the joint beneficary/spouse is used to determine a distribution period. The life expectancies of contingent benficaries are not used.

[ccassetty]

Thank you. You make it sound so simple.

Carolyn