RMDs & dec'd owner

[doombuggy]

I just received word that the owner of tow of my plans has passed away. I knew he was sick, but did not realize how bad.

He had been getting an RMD from each company's plans, as he was a more than 5% owner. At Company A, he and his wife are the owners. In Company C, he and another person are the owners. I don't know if his wife is his designated beneficiary for his ownership in either or both companies, nor do I know if his wife is his bene for his plan accounts (the client keeps copies of the enrollment forms), but for my quesiton, I will assume that the wife gets it all. The document states that a distribiton due to death may be processed as soon as administratively feasible after death. The plan is with American Funds.

If the accounts of the dec'd owner are not distributed before the end of the year, does an RMD need to be processed? I have been doing RMDs for 10 years, but never had this problem. Thanks!

[Bird]

There are lifetime RMDs for 2006, determined as of Jan 1 when he was alive (right?) but they are paid to his beneficiary instead of to him.

[doombuggy]

We found out this morning that he died on 2/6/06. I will note in the files that if the accounts are not distributed to the bene or benes by the end of November an RMD needs to be processed to said bene from each account. Thanks for your help!