Beneficiary Information

[Kathleen Reynolds]

#3209

The Beneficiary Information window is used to indicate when you want to assume the owner and/or beneficiaries die. Use this window whenever you are illustrating a Stretch IRA, Roth IRA, Inherited IRA, Spousal Rollover, or multiple beneficiaries.

Entering the information on this screen can be done quickly and easily. Just answer the following questions:

Assume Owner Dies? Answering Yes allows you to enter the year owner dies. Remember that you can enter a year prior to the current year (allowing you to illustrate Inherited IRAs). To have the software use the owner’s single life expectancy to calculate the owner’s year of death, check the Use Life Expectancy checkbox right next to the year of death. If this checkbox is already checked, uncheck it to be able to enter the year of death.

Is Death in First Quarter of Required Begin Date? For Deaths prior to 1/1/2020, If the date of death entered is within the same year as the Required Beginning Date (RBD) for distributions, and the death occurs in the first quarter of the year in which the owner turns 70½, select “yes” otherwise, select “no.” See Beneficiary Options.

Assume Beneficiary Dies? Answering Yes allows you to enter the year the beneficiary dies. Remember that you can enter a year prior to the current year. To have the software use the joint life expectancy (or the owner and beneficiary) to calculate the beneficiary’s year of death, check the Use Jt Life Expectancy checkbox right next to the year of death. If this checkbox is already checked, uncheck it to be able to enter the year of death.

Assume Spouse Rollover? This question is only available when the beneficiary is the Spouse. Answer Yes if the surviving spouse plans on rolling over the plan into his/her own IRA after the Owner’s death. Also set the Assume Spousal Rollover? selection to Yes for IRA cases in which the Spouse (as sole beneficiary) elects to treat it as your own.

When you answer Yes, the program uses the Spouse as the new owner for purposes of calculating RMDs starting in the year of the election/rollover (except for the year of the Owner’s Death). If the surviving spouse is not already in RMD status (70½ pre Secure Act, and age 72 for Secure Act), then there is no RMD in the year of the rollover. According to IRS Treas. Reg. §1.408-8, A-5(a), fifth and sixth sentences; if the surviving spouse (as the sole beneficiary) makes an election to treat an inherited IRA as her own in any year after the year of the Owner’s death, the election is retroactive to the beginning of the year in which the election occurs.

It is also necessary that you answer the Rollover Year question with the year in which the spouse rollover occurs. A rollover by the Spouse can occur in the year of the Owner’s death and in all subsequent years up to and including the year of the death of the Spouse.

Does the Spouse Name a Beneficiary? This is another question that is only available if the beneficiary is the spouse. The spouse’s beneficiary is relevant after his/her death. If you’ve indicated that the spouse pre-deceases the owner, this question changes to “Include Contingent Beneficiaries.”

Beneficiaries at Spouse’s Death/Contingent Beneficiaries Enter up to 5 different beneficiaries, which will be used when the owner and/or spouse have died. Text on the screen will display when these beneficiaries are used in the calculation.

Apply Separate Accounts Rule Check this box to have the IRA split between the multiple beneficiaries. Only check this box if the Separate Accounts Rule is going to be satisfied.

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