Of course planning for such events will be most relevant for those participants with large qualified plan or IRA balances. The new RMD rules continue to allow for a trust to be the designated beneficiary and for the life expectancies of the trust beneficiaries to be used in determining RMDs, as long as all such beneficiaries are individuals and are identifiable. A spouse beneficiary of a trust may take advantage of the special rules for spouse beneficiaries, but only if he or she is the sole beneficiary under the trust. The deadline to provide the applicable documentation of the trust to the plan's administrator and trust beneficiaries under the new RMD rules is revised to be the end of the year following the year of the participant's death. The new RMD rules also clarify that a testamentary trust qualifies as a trust that may be considered in determining beneficiaries.
Special rules apply where multiple beneficiaries have been designated.
If the beneficiaries' allocable amounts of the participant's plan account are divided into separate accounts, then the new RMD rules are applied to each beneficiary with respect to his or her life expectancy. Generally, if separate accounts for the beneficiaries are not established, then the age of the oldest beneficiary is used to determine the applicable life expectancy and resulting RMDs. When a participant dies before his or her RBD, the RMD options depend on who is determined to be the designated beneficiary. When the applicable life expectancy RMDs begin, the spouse's single life expectancy is determined and recalculated each year in accordance with the same single life expectancy tables applicable under the old RMD rules. This will result in the RMD rules being applied to the spouse as the participant.