MODIFICATION AND UPDATE OF SIMPLIFIED CHART OF DISTRIBUTION CHOICES FOLLOWING DEATH OF PARTICIPANT OF QUALIFIED PLAN/IRA UNDER FINAL REGULATIONS

By Scott Edward Darling, Esq.^*

I. INTRODUCTION

In 2001, the Internal Revenue Service issued proposed new regulations regarding qualified retirement plan and IRA distributions. In April of 2002 the IRS issued "final" regulations incorporating the 2001 proposed regulations. (which modified the 1987 temporary regulations) with some revisions (and some additional temporary regulations mainly for annuity benefits). The final (and new temporary) regulations were optional for 2002 and are mandatory thereafter. The final (and new temporary) regulations greatly simplify minimum required distributions both before and after the plan participant’s death.

Under the final regulations, most options are the same whether the plan participant dies before or after the required beginning date ("RBD"). There are still a few significant differences between pre- and post-RBD distribution options (as noted in the accompanying chart).