Options For A Non-Spouse IRA Beneficiary (When The IRA Owner Dies Before The Required Beginning Date)

If the non-spouse IRA beneficiary is:

One Individual:

• Distribute based on the single life expectancy of the non-spouse IRA beneficiary, using the non-recalculation (term-certain) method.

The distributions must begin by the end of the year (December 31st) following the year of death of the IRA owner.

The life expectancy factor should be determined using the non-spouse beneficiary's age in the year after the year of the IRA owner's death.

• Five-Year Rule: Withdraw all assets either in a "lump sum" or in installments by December 31of the fifth year following the year of death of the IRA owner.

Multiple individuals (assuming the IRA account has not been divided into separate accounts):

• Distribute based on the single life expectancy of the oldest designated IRA beneficiary, using the non-recalculation (term-certain) method.

The life expectancy factor is determined using the oldest designated beneficiary's age in the year after the year of the IRA owner's death. Distributions must begin by the end of the year (December 31) following the year of death of the IRA owner.

This rule applies even if one of the beneficiaries listed is the IRA owner's spouse.

• Five-Year Rule: Withdraw all assets either in a "lump sum" or in installments by December 31 of the fifth year following the year of death of the IRA owner.

A Non-Living Entity Or Multiple Beneficiaries Containing At Least One Non-Living Entity (assuming the IRA account has not been divided into separate accounts):

• Five-Year Rule: Withdraw all assets either in a "lump sum" or in installments by December 31 of the fifth full year following the year of death of the IRA owner.

Note:

Remember, if the IRA is divided into separate accounts (one for each beneficiary) by September 30 of the year after the year of the IRA owner's death, each separate IRA may be distributed to each beneficiary using the rules for "One Individual" listed above. If one beneficiary is the surviving spouse, the special elections for a surviving spouse will apply to his or her separate IRA.