RMD for year of death

[CassandraS]

Client was taking installment payments. He was age 80. He died this year. RMD regs says that the RMD for the year of death is calculated as of the participant lived until the end of the year. Is there any exception that would require the RMD for the year of death to be calculated using the spouse beneficiary’s single life expectancy ( and not the decedent's Joint life-expectancy of uniform table?

Thanks

Cass

[ETA Consulting LLC]

No. Technically, you knew the amount of RMD that the taxpayer would be due to receive for the year on January 1st (since you're using the value on December 31st of the preceding year). So, there is no need for recalculation, you're only using the amount that you already calculated. In other words, nothing changes; except for the fact that the amount will be paid to the beneficiary.

Good Luck!

[CassandraS]

Thanks ERISA- that is what we thought. Your confirmation helps.

The push back we are getting is that the participant’s life expectancy is replaced with the beneficiary’s life expectancy, effective as of the year of death. Never heard such a thing neither have my boss, and I have been researching this since yesterday. The plan document does state the replacement ( of the decedent’s life expectancy with the surviving spouse’s life-expectancy), but does not say that it occurs in the year of death.

[ETA Consulting LLC]

Thanks ERISA- that is what we thought. Your confirmation helps.

The push back we are getting is that the participant’s life expectancy is replaced with the beneficiary’s life expectancy, effective as of the year of death. Never heard such a thing neither have my boss, and I have been researching this since yesterday. The plan document does state the replacement ( of the decedent’s life expectancy with the surviving spouse’s life-expectancy), but does not say that it occurs in the year of death.

It's going to be the longer of two life expectancies; but that will be for years subsequent to death. In such case, you are comparing the participant's single life expectancy (in the year of death) minus 1 for each subsequent year to the surviving spouse's single life expectancy for each year of distribution. This all begins in the year following the year of death; and only when the: 1) Participant dies on or after the required beginning date; and 2) The surviving spouse is the designated beneficiary.

Good Luck!

[CassandraS]

Thanks so much ERISA

Cass