IRS Clarifies IRS Notice 2007-7

[jevd]

Just in case you haven't read the news items on Benefits Link here is the IRS Newsletter re: Clarifying Notice 2007-7

HERE

[Guest mjb]

The newsletter clarifies three things:

1. non spouse bene can elect to recieve life time payments even if plan only provides for lump sum distribution ( i.e. 5 year rule) and does not allow periodic payments over life of benefiicary.

2. rule no 1 applies only if beneficiary begins receiving periodic payments by the end of the year following the year the owner died. E.g., If owner dies in 2006 beneficiary must begin receiving periodic payments under the IRA by 12/31/07. If this requirement is not met then all funds in IRA must be paid out within 5 years after the death of the owner.

3. Plan does not have to provide for rollover by nonspouses.