Test Your Knowledge

  George H. Coughlin II  2002  All Rights Reserved          Return to Home Page

The following questions provide a quick way to gauge your knowledge of the required distributions from IRA's, qualified retirement plans and TSA's under 403(b). Everyone with assets in a retirement plan, regardless of his or her age, or the beneficiary of such plans needs to have a reasonable understanding of minimum required distributions. In certain circumstances, that understanding can be more valuable than the selection of a prudent investment. 

  1. Explain the difference between a Designated Beneficiary and a recipient named on a beneficiary designation form?  [1.401(a)(9)-4, A-1]
  1. For purposes of required distributions paid to a beneficiary in 2003 and subsequent years, what action must be taken in every case that involves the death of a plan participant before January 1, 2003? [1.401(a)(9)-1, A-2(b)(1)] 
  1. What is the deadline to establish separate accounts that allow the beneficiary of each respective separate account to use his or her own life expectancy when computing the maximum stretch-out potential?    [1.401(a)(9)-8, A-3]
  1. List the four requisites a revocable trust must fulfill in order for it to serve as a suitable beneficiary of an IRA, TSA or qualified retirement plan?  What is the deadline for satisfying each of those requirements?  [1.401(a)(9)-4, A-5(b)] 
  1. How do you determine the applicable distribution period for required distributions following a participant’s post-RBD death if the account has no Designated Beneficiary?  [1.401(a)(9)-5, A-5(c)(3)]
  1. If a QTIP trust is used as a beneficiary for a qualified plan, what resource document spells out the guidelines that such a trust must follow in order to qualify for the marital deduction and also satisfy the minimum distribution rules? 

If you feel hesitant about your answers to these questions, seek assistance from a knowledgeable tax professional. You will know that person truly understands this subject if he or she can readily answer the same questions. If you receive a vague or evasive response, please contact another professional. The decisions you must make are too important to rely on guesswork or incompetent advice.  


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