Beneficiary Designations in Retirement Plans: SECURE Act Provisions, See-Through Trusts, RMDs

This webinar will examine complex and often overlooked beneficiary designation issues in retirement plans, including required minimum distribution (RMD) rules before and after the SECURE Act, and how those rules affect inherited retirement accounts. Our experienced trust and estate advisers will draw on real world experience to explain how beneficiary classifications, payout requirements, trusts, and transition rules can dramatically change post death tax outcomes for plan participants and their beneficiaries.

Since the enactment of the SECURE Act, the once familiar stretch IRA rules have been replaced by a new framework that continues to generate confusion. Tax practitioners routinely struggle with the proper application of the 10 year payout rule, identifying eligible designated beneficiaries, handling undistributed RMDs in the year of death, and the interaction of beneficiary designations with estate planning documents. Errors in these areas can result in missed deadlines, accelerated taxation, and unnecessary penalties.

In practice, even small differences in beneficiary designations can completely change the RMD outcome. For example, a surviving spouse named directly as beneficiary may roll the account into their own IRA and delay RMDs, while an adult child beneficiary will generally be subject to the 10 year payout rule, often triggering large, unexpected taxable distributions in years nine and 10. 

Practitioners also face significant uncertainty when trusts are named as beneficiaries, particularly when determining whether a trust qualifies as a see through trust. Additional problems surface when retirement plans include a charitable organization or contingent or multiple beneficiaries. 

Listen as our panel of notable estate planning attorneys explains distribution rules after the SECURE Act and handling diverse beneficiary designations in retirement plans.