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RMD Calculator Dialog 5 - Non-Designated Beneficiary

 
Review the RMD Calculator Dialogs - Selector article if you are uncertain about the RMD scenario.
 
This article provides guidance for calculating the Required Minimum Distribution (RMD) for Non-Designated Beneficiaries. A Non-Designated Beneficiary is an estate, charity, or non-see-through trust

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The 2001 RMD Rules for Non-Designated Beneficiaries were minimally affected by the SECURE Act of 2019 (effective 1/1/2020). The  change from 70-1/2 to 72 years of age for RMDs indirectly caused the Required Beginning Date (RBD) to slip slightly.
 
Gold subheadings are used below to differentiate the affected RBD outcomes in Step 7. The RMD Calculator will automatically select the correct method.
 
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Definitions

Note:

The singular is used below. However, there may be simultaneous beneficiaries named.
 

Participant

The person who opened the retirement account.
 

Participant Date of Death

The key date for applying pre-SECURE Act provisions (2001 Rules), or post-SECURE Act provisions (2020 Rules).
 

Non-Designated Beneficiary

An estate, charity or non-see-through trust. These entities are not natural persons and are considered "non-designated beneficiaries."
 

Required Beginning Date (RBD)

The date by which the Participant is required to commence Required Minimum Distribution

s (RMDs).

 
 
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Non-Designated Beneficiary Scenarios
Gold Subheadings are used below to differentiate the circumstances. There are two Non-Designated Beneficiary scenarios.
 
Scenario 5A:  Participant Died Before Required Beginning Date (RBD).
Scenario 5B:  Participant Died After Required Beginning Date (RBD).
 
 
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Scenario 5A:  Participant Died Before Required Beginning Date

(RBD).

 
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Participant Setup

1.  Enter the name of the Participant as a Contact, including the EIN Number, if available.
 
2.  On the Personal tab, enter the Date of Death. The Deceased? checkbox will automatically be checked.
The Date of Death of the
Participant governs the application of the 2001 Rules or the 2020 Rules.
 
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Designated Beneficiary Setup (Estate, Charity, or Non-see-through Trust)

 
1.  If the Designated Beneficiary is not already in Advantage as a Contact, enter the name of the Designated Beneficiary as a Contact and enter the Contact’s Date of Origin. If no Date of Origin is present in Advantage, the RMD Calculation Report will show "Not Available" for the Date.
 
2.  If the Designated Beneficiary is not already in Advantage as a Client, create a Client record for the Designated Beneficiary.
 
3.  Navigate to the Client Profile of the Designated Beneficiary who is receiving the money. With the Designated Beneficiary Client Profile screen open, add the inherited IRA. See Add an Account Dialog, if necessary.
 
 
4.  On the Account Details screen, in the Account Flags panel:
 
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RMD Calculator Dialog Box

To calculate a Required Minimum Distribution (RMD) for a Client account:
 
 
 
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Step 1. Calculate RMD For
Information required in Steps 2-7 depends on the selection in Step 1.  
 
 
Select Non-Designated Benef. when there is no beneficiary or when the beneficiary is not a natural person. For example, the Participant's estate or a charity is a non-designated beneficiary.  A non-see-through trust is also a Non-Designated Beneficiary. A Non-Designated Beneficiary does not have all the rights of a Designated Beneficiary.  
 
Note:
 
 
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Step 2. Participant
 
 
Select the deceased Participant (original owner of the asset) whose date of death will govern the calculated outcome. The Date of Birth (DOB) of the selected Contact will be displayed. Enter a Date of Death (DOD). The Date of Death governs the inception of the 5-Year Rule payout period if the Participant died before RBD.
 
 
 
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Step 3. Participant's Plan Details
 
 
Select a Plan Type for the account:
 
 
 
 
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Step 4. Collective Bargaining and Government Plans
Not applicable.
 
 
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Step 5. Current Asset Holder
Information requested about the Current Asset Holder varies, depending upon for whom the RMD is being calculated and the Date of Death of the Participant or Decedent in Step 2. The Current Asset Holder panel header in Step 5, is the same as the Calculate RMD for selection in Step 1.  
 
When the Current Asset Holder (in Step 1) is Non-Designated:
 
The Required Beginning Date (RBD) of the deceased Participant governs the distribution of an asset account with one or more Non-Designated Beneficiaries (estates, charities, and non-see-through trusts).
 
The RBD is April 1 of the year after the Participant turned 70-1/2 or 72, depending upon the Participant's date of death (6/30/1949 or earlier, or 7/1/1949 or later), respectively.
 
The most recent holder of the asset account who recently died is deemed to be the Participant for RMD calculation purposes.
 
 
 
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Step 6. Account Value
 
Enter the Account Value of the account on 12/31 of the prior year.
 
The Valuation Date must be 12/31 of the prior year.
 
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Step 7. Required Minimum Distribution
 
 
Click the Calculate RMD button to have ProTracker Advantage calculate the RMD amount.
 
The must be taken by is the date by which the RMD must be taken.
 
The calculation Method is listed on this panel. The calculation Method is also listed on the RMD Calculation Report.
 
Click the View RMD Calculation button to view the report that shows the parameters used to calculate the RMD value.
 
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RMD Calculator Reports

 
 
 
 
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Scenario 5B:  Participant Died After Required Beginning Date

(RBD).

 
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Year of the Decedent's Death (Method B)

An RMD must be taken for the year based upon the decedent's age in the year of death using the Uniform Lifetime Table.
 
 
 
 
 
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Year after the Decedent's Death (Method Q)

The RMD is calculated using the Single Life Expectancy Table for the Participant's age at the time of death, less 1 year.
 
 
 
 
 
 
 
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Subsequent years (continue Method Q)

In the subsequent years after the first year of the Decedent's death, the factor for the prior year is reduced by 1 each year (Fixed-Term Method or N-1).
 
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Buttons
Click Here for RMD Caution
Click the RMD Caution button to read RMD cautionary information.
 
Save
Click the Save button to record the RMD calculation on the Accounts RMD tab.
 
Cancel
Click the Cancel button to exit the RMD Calculator without updating the Accounts RMD tab.
 
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RMD Wizard
After setting up an RMD for the above situations, the Advantage RMD Wizard will calculate future RMDs without requiring further setup.
 
Further RMD calculations for this account will be calculated automatically by the RMD Wizard each year. 
 
To see the RMD Wizard, click on Operations > Accounts > RMD. In the Assistant panel, click on RMD Wizard.
 
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RMD Calculation Assistance
ProTracker Software provides limited RMD calculation assistance. Print the RMD Scenario Fact Set form and email it as an attachment to: sales@protracker.com.
 
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RMD Resources
 
RMD Client Overview (includes index of RMD Help Articles)
 
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