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The following questions provide a quick way to test your advisor's understanding of
required distributions from IRA's, qualified retirement plans and TSA's. An
astute observer may notice that these questions are identical to the ones listed on the
page entitled "Test Your Knowledge".
- Explain the difference between a Designated Beneficiary
and a recipient named on the beneficiary designation form for a qualified retirement plan,
IRA or TSA.
- Describe the options available to a
non-spouse beneficiary of an IRA who wishes to avoid an immediate payout of the
decedent’s account and the subsequent tax liability.
- What complications arise if you name a charity
as beneficiary for a portion of the assets in your qualified retirement plans, IRA's
or TSA's?
- Why should a married couple seldom, if ever, elect to redetermine the life expectancy of both spouses
when computing required distributions at age 70½ and beyond?
- List the four requisites a revocable
trust must fulfill in order for it to serve as a suitable beneficiary for required
distribution purposes under IRC §401(a)(9).
- If a single parent with an IRA is approaching age 70½ or an 80-year-old
widow(er) is about to establish a spousal
rollover, why is it important for him or her to elect a primary method for calculating
required distributions if the children are named as beneficiaries of the account?
You will know that you have connected with a knowledgeable planning professional if he
or she can readily answer these questions. In the event 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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