RMD and QDOTs

[Guest P A Weick]

Would there be any difference in treatment for retirement benefit purposes between a QDOT for a non-citizen spouse and any other form of marital trust being the Participant's Designated Beneficiary? I assume there is not and that the calculation of required minimum distributions, other payouts and options (including spousal rollover) would be done under the normal rules applying to benefits payable to trusts. Does anyone else have a take on this.

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[BPickerCPA]

You are correct that the QDOT designation of the trust itself has not effect.

You mention spousal rollovers. No trust can do a spousal rollover. If the trust provisions are such that the spouse can defeat the trust and take absolute ownership of the IRA, then the spouse can do a spousal rollover. In the case of a QDOT, that would be a taxable event.

[Bruce Steiner]

The final QDOT regulations allow the benefits to be payable to the spouse, and for the spouse to create a QDOT and agree to contribute the "principal" portion of each distribution to the QDOT. Thus, you can get the benefit of both the rollover and the marital deduction. We have used this procedure successfully.

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Bruce Steiner, attorney

(212) 986-6000 (NY office)

(201) 862-1080 (NJ office)

also admitted in FL