RMD for deceased participant, can check be made payable to estate?

Participant, former employee, died this year.  She was taking RMDs.

Can the 2021 RMD check be made payable to the estate?

Did she have a named beneficiary or beneficiaries? If not, what does the plan language have for a hierarchy of beneficiaries if no one is named? IMHO, you have to follow through that process.

1 hour ago, Belgarath said:

Did she have a named beneficiary or beneficiaries? If not, what does the plan language have for a hierarchy of beneficiaries if no one is named? IMHO, you have to follow through that process.

Agree.  The fact that it is an RMD is irrelevant as far as who gets it.  It goes to the beneficiary, however that is determined.

I thought the RMD for the year of death is taxable to the participant.  Anti-assignment prevents me from paying it elsewhere.

Just was checking to see if we could pay it to the estate.  I guess it wouldn't matter if we paid it tot he particiapnt; whoever has signing authority on behalf of her trust can cash the check.

The RMD is still part of his account balance when he dies, therefore it is payable to his beneficiaries. It is not eligible for rollover as it is still an RMD.

I stand corrected.

For the year of the participant's death, you should make the check payable in the name of the participant. The executor/administrator of the estate would then have to endorse the check in his/her representative capacity and deposit it into the Estate of Participant checking account. The reason I am taking this position is that the payment was required to be made to the participant and the after-death RMD rules do not become effective until the calendar year following the calendar year of the participant's death. Also the RMD regs allow the beneficiary to be determined as of the September 30 of the year following the year of the participant's death. In this way, if there was a beneficiary whose life expectancy (or under the 10-year rule) would result in adverse bunching of income taxation in the years the benefit would otherwise be payable to him/her, it would be possible to do some after-death tax planning if such beneficiary timely signed a disclaimer of all interest in the participant's account. As for future years, I agree with the others that you would have to make arrangements with the contingent beneficiaries, if any, or the person or persons entitled to receive the participant's account balance under the terms of the plan document if there is no living named beneficiary at the time of the participant's death.

14 hours ago, rocknrolls2 said:

For the year of the participant's death, you should make the check payable in the name of the participant. The executor/administrator of the estate would then have to endorse the check in his/her representative capacity and deposit it into the Estate of Participant checking account. The reason I am taking this position is that the payment was required to be made to the participant and the after-death RMD rules do not become effective until the calendar year following the calendar year of the participant's death. Also the RMD regs allow the beneficiary to be determined as of the September 30 of the year following the year of the participant's death. In this way, if there was a beneficiary whose life expectancy (or under the 10-year rule) would result in adverse bunching of income taxation in the years the benefit would otherwise be payable to him/her, it would be possible to do some after-death tax planning if such beneficiary timely signed a disclaimer of all interest in the participant's account. As for future years, I agree with the others that you would have to make arrangements with the contingent beneficiaries, if any, or the person or persons entitled to receive the participant's account balance under the terms of the plan document if there is no living named beneficiary at the time of the participant's death.

 I can see how that could be seen as the right option- it is practical. However, the RMD for the year of death must be distributed/paid to the beneficiary and included in the income of the beneficiary, if it was not already taken by the decedent. It would still be calculated as if the account owner lived through to the end of the year.

@Lou S.'s response above is 💯% correct.

On 12/15/2021 at 3:17 PM, rocknrolls2 said:

For the year of the participant's death, you should make the check payable in the name of the participant.

On 12/16/2021 at 6:13 AM, Appleby said:

 I can see how that could be seen as the right option- it is practical. However, the RMD for the year of death must be distributed/paid to the beneficiary and included in the income of the beneficiary, if it was not already taken by the decedent. It would still be calculated as if the account owner lived through to the end of the year.

rocknrolls2, I agree with Appleby. I think you have to distinguish between what has to be paid and when (RMD in year of death), and to whom it belongs. If the check had been cut right before the individual died, it would go into the estate. But once the participant dies, the account belongs to the beneficiary.