Who is the beneficiary for RMD calc purposes?

[AlbanyConsultant]

This is technically a hypothetical, but when it came up I didn't have an answer:

We've all had the cases where the participant's beneficiary form is old and doesn't match the current legal beneficiary (cases of re-marriage being the most common). So let's say the plan beneficiary designation form has Spouse 1 as the beneficiary, but Spouse 2 is the current for-all-purposes-outside-the-plan legal beneficiary, and they are both less than 10 years younger than the participant. Whose DOB should be used for calculating the plan RMD?

Just curious.

[rcline46]

less than 10 years means you use assumed 10 years and it does not matter.

[Bird]

I agree with Reed, it doesn't matter. But if it did matter, you'd use the actual beneficiary and ignore the incorrect form naming Spouse #1.

[masteff]

Unless you have some oddball scenario in which Spouse #2 gave spousal consent to Spouse #1 being primary beneficiary, then at remarriage, the old form became obsolete because it lacks spousal consent.

[ESOP Guy]

Unless you have some oddball scenario in which Spouse #2 gave spousal consent to Spouse #1 being primary beneficiary, then at remarriage, the old form became obsolete because it lacks spousal consent.

In fact I am seeing more and more documents that say in these cases the old beneficiary form is not valid. Just had a situation recently where a guy died. He never changed his beneficiary form when he divorced his wife. The client was saying we need to pay a payment to her as she is the beneficiary on record.

I pointed out to them their plan document is very clear upon divorce a beneficiary form to the former spouse is no longer valid. We had to treat the situation as if they had no form.

In this care it turned out the plan pointed to the children which the ex-spouse had custody of them. They were minors so she had control of the money. She was fine with her kids getting the money and her watching over it until they were 18. I got the impression she never asked (or had any expectation) for the money the client simply looked to the form and was saying the ex-spouse is the beneficiary.