OK for participant to designate his fraternity as the beneficiary of h

[Guest]

There are no rules on who can be a beneficiary other than what are in the plan document. There are certain rules when figuring out minimum required distributions for non-spouse or non-human beneficiaries. There shouldn't be a problem with this designation.

[Guest mam]

Ok. So there aren't any issues with a Trust being irrevocable or not? Can this decision to name his fraternity be changed at any time?

[Guest mam]

A participant wants to designate his fraternity as the beneficiary of his 401(k) account. What are the restrictions that apply in this case? What are the restrictions that apply if a Trust is designated as his beneficiary? Thanks!

[Alf]

No, if the participant is (and remains) single (which I presume he is if he wants to name his fraternity as his beneficiary). If the participant is married, his spouse will have to execute a qualified consent in connection with the designation.

[Guest]

From my research, I understood that only individuals could be named as beneficiaries for qualified plans. I recall being instructed that if a participant names an organization or other entity as beneficiary for their plan benefit, then the plan is to treat that election as having never been made. I always thought that this made some twisted sense from a tax collection standpoint. Is this not the case? Any cites?

[MWeddell]

Dan,

Proposed regulations under Code Section 401(a)(9) (prior to its amendement by SBJPA) shows that the IRS expects that persons other than individuals may be named as beneficiaries.

That's not exactly on point. Maybe someone else has a better cite.

[Guest mam]

Dan- Thanks for that insight. For some reason that I can't seem to pin down, that has been in the back of my mind on this also. If anyone else has any thoughts or cites, please post them. Thanks.