Life of the Participant

[Guest Twinky]

The participant passed away in 2005. He was over 70½ and receiving RMD's. He has no spouse. He has many beneficiaries listed. Some of the beneficiaries want to receive the lump sum, some would like to receive installments, and one would like to receive an annuity.

The document states that lump sum, installments and annuities are allowed methods of distribution.

Lump Sum: easy enough

Installments -

adoption agreement states;

"over a period of years certain selected by the participant that is less than the life of the participant payable on an annual, quarterly or monthly basis."

doc states;

In substantially equal annual, quarterly or monthly installments over a period of more than one year but which does not exceed the period designated in the Adoption Agreement, as selected by the Participant (provided that such period is not greater than the Participant's life expectancy or the Participant's and the Participant's designated Beneficiaries' joint life expectancy as of the Annuity Starting Date), plus accrued net income.

Annuities -

adoption agreement states;

"for the life of the participant"

doc states;

By the purchase and delivery of a single premium, nontransferable, fully refundable, annuity policy issued by a legal reserve life insurance company payable in equal installments for the life of the participant that terminates upon the participant's death, or providing for payments over such period as may be designated in the Adoption Agreement as selected by the Participant; provided, however, unless the Employer has designated a life annuity distribution option in the Adoption Agreement, in the event of distribution of such an annuity policy to a Participant, such duration shall be for a fixed duration which is less than the Participant's life expectancy as of the Annuity Starting Date. The refund feature under such annuity policy following the death of the Participant shall inure to the benefit of the person or persons designated by the Participant as his Beneficiary.

The client is asking what "life of the participant" means. Does it mean "life expectancy"? Or are these not methods not an option due to the participant being deceased?

Thanks for all your help!

[Belgarath]

I'd go back and check the document/adoption agreement again. I've never seen a document that doesn't specify what death benefit options are available to beneficiaries.