Taxation of distribution to a beneficiary which is a trust

[Alan Simpson]

There is a deceased participant in a retirement plan that has named trusts (each trust for a specific individual) as her beneficiaries. How is the distribution handled and taxed?

[Lame Duck]

Is this before or after the participant's RBD? What does the document say about distributions on death? Generally, the rules of 401(a)(9) apply to distributions. Prior to RBD, payments to a non-designated beneficiary must be made within five yearas of the date of death. Payments to a designated beneficiary may be made over the life expectancy of the beneficiary.(Reg 1.401(a)(9)-4 Q-1) Reg 1.401(a)(9)-4 Q-5 sets forth the requirements that must be met for the beneficiaries of a trust to be considered designated beneficiaries.