Non-spousal beneficiary of Company Plan
Upon death of the owner of a 401(k), what are the options of a non-spousal beneficiary (son)? Can he roll it over to a IRA or must he begin to take RMD’s and if so which table would he use?
Upon death of the owner of a 401(k), what are the options of a non-spousal beneficiary (son)? Can he roll it over to a IRA or must he begin to take RMD’s and if so which table would he use?
Permalink Submitted by Alan - IRA critic on Wed, 2016-12-07 19:42
The son could take life expectancy RMDs from the 401k in some cases, but if the participant passed prior to this RBD, the plan provisions might specify that the 5 year rule applies. To avoid the 5 year rule, the son could request a direct rollover to an inherited IRA and if this is done before the end of the year following the year of death, the son could then take life expectancy RMDs from the inherited IRA. If the direct rollover misses the deadline, then the inherited IRA RMDs would be the same as the plan RMDs. Also, the son has the option to have the direct rollover moved to an inherited Roth IRA (similar to a conversion), and the RMDs would be the same. Beware of completing distribution papers from the 401k because any distribution check made out to the son cannot be rolled over at all.