Non Spouse Beneficiary RMD in year of death
A participant in a qualified retirement plan dies after his ‘required beginning date’ for RMDs. He leaves it to a nonspouse.
The nonspouse beneficiary is transferring the money into an inherited IRA, in the year of the death of the participant.
Does the plan have to force an RMD to the nonspouse beneficiary prior to the transfer?
If so, how is the amount determined?
many thanks…
Permalink Submitted by Alan Spross on Wed, 2010-06-02 21:21
The plan must either calculate the RMD for the year of death and distribute it to the beneficiary before the transfer OR hold back the RMD amount from the transfer and then distribute it to the beneficiary prior to the end of the year of death. The RMD calculation for the year of death is based on what the employee RMD would have been had the employee lived all year. The balance used in the determination is the prior year end balance in the plan.