Retirement Planning- 11 Post death Distribution Requirements Relative to Beneficiary Type

Question 1

Demonstrate the impact of estate and income tax on an IRA.

Answer 1

Question 2

IRD deduction is taken as the income is __________

Answer 2

received by the beneficiaries

Question 3

What is Income in Respect of a Decedent

Answer 3

Applies to income the decedent had the right to, but
never received

Question 4

IRS code section 691(c) allows a deduction for
estate tax paid ________

Answer 4

on IRA and Qualified Plan assets.

Question 5

IRD Deduction for retirement plan

Answer 5

Minimizes income tax liability for beneficiaries

Question 6

What are the IRS tables to calculate retirement distributions at death?

Answer 6

Question 7

What are the qualifications of designated beneficiaries?

Answer 7

Designated Beneficiaries:
* Must be an individual
* Do not have to be identified by name, but must be
identifiable as of designation date
* Certain trusts can qualify for “see-through” treatment
* Estates, charities, partnerships, corporations, or LLCs
do not qualify
Beneficiary Planning

Question 8

Depict a flow chart to demonstrate all the people that an IRA owner and is in charge of in the context of beneficiary planning

Answer 8

Question 9

Depict a flow chart to demonstrate how the distributions of death are allocated?

Answer 9

Question 10

Who does a retirement account beneficiary split its assets with (3 people)?

Answer 10

Question 11

What are the qualifications of an eligible designated beneficiary?

Answer 11

Spouse of the decedent
➢ Disabled beneficiary
➢ Chronically Ill
beneficiary
➢ Individuals not >10 years
younger than decedent
➢ Minor child of the
decedent (until age of
majority)
➢ *Certain Trusts

Question 12

What are the qualfications of a non-eligible
Designated
Beneficiary (10-year rule)?

Answer 12

Non-Spouses >10
years younger than
decedent
➢ *Certain Trusts

Question 13

What are the qualifications of a non-designated
Beneficiary
(5-year rule or
As Rapidly As)?

Answer 13

Charities
➢ Decedent’s Estate
➢ *Certain Trusts

Question 14

What are the qualifications of a non-designated
Beneficiary
(5-year rule or
As Rapidly As)?

Question 15

Depict how distributions of death would be allocated for multiple beneficiaries?

Answer 15

Question 16

Account beneficiaries are determined by the designated date which is?

Answer 16

(September 30 of year following death of IRA Owner)
Separate accounts rule by December 31st of the year after death

Question 17

What are the benefits of stretching out beneficiary distributions?

Answer 17

Smaller required minimum distribution
* Minimization of tax liability and extension of tax deferral
– At least for 10 years?
* Flexibility for beneficiaries in timing receipt of income
* Potentially longer stream of payments
* Only matters if beneficiaries will leave the money in the
IRA (or if they have to!