How do my siblings and I receive inherited pension benefit payments from our deceased parent?

By Denise Appleby AAA
A:

Generally, the provisions of the plan document determine the distribution options available to beneficiaries of retirement plan assets. From a regulatory perspective, you are allowed to distribute the assets over the life expectancy of the oldest sibling. If the assets are allocated into separate accounts by December 31 of the year following the year your parent died, then each sibling is allowed to use his or her own life expectancy to calculate required minimum distribution amounts.

If your parent was retired but passed away before the required beginning date, then you have the option of receiving your payments over five years or less. But this will only apply if the beneficiary did not begin distributions using the life-expectancy method by December 31 of the year following the year your parent died.

To be sure of the options available to you and your siblings, check with the administrator for the defined-benefit plan.

For more information about inherited pension benefits, read Inherited Retirement Plan Assets - Part 1 and Part 2.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ...
  2. Who does Warren Buffett plan to bequeath his estate to?

    Find out how much Warren Buffett is leaving for his heirs and how he wants the funds invested after his death. Learn about ...
  3. Is there any way to opt out of paying Social Security?

    Understand more about the purpose of the Social Security system and learn which groups of taxpayers are automatically exempt ...
  4. Are part-time employees eligible for fringe benefits?

    Learn how offering fringe benefits allows employers to entice new talent to join their teams, although part-time workers ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...

You May Also Like

Related Articles
  1. Professionals

    Why Retirement Advice Is Better But ...

  2. Professionals

    Coming Soon: Private Equity In 401(k) ...

  3. Professionals

    Ways To Cut 401(k) Expenses

  4. Professionals

    Tread Carefully With Retirement Plan ...

  5. Mutual Funds & ETFs

    ETFs Commonly Found In Retirement Accounts

Trading Center