Question

Which of these statements regarding distributions from retirement plans where death has occurred before the required beginning date (RBD) of required minimum distributions is false?

A) A spouse must take distributions over the spouse's remaining single life expectancy, beginning in the year following the year of death.
B) A nonspouse beneficiary in a qualified plan, Section 403(b) plan, governmental Section 457 plan, or IRA also may use a direct trustee-to-trustee transfer of an inherited amount to create an inherited IRA.
C) A spouse beneficiary may roll the distribution over into her own IRA and is not required to take a distribution until they reach their own required beginning date (RBD).
D) An estate beneficiary must take distribution from the plan using the 5-year rule.

Answer 1

The false statement about distributions from retirement plans when death occurs before RBD is that a spouse must take distributions over their remaining single life expectancy, starting the year after death.

Step-by-step explanation:

A student asked which statement regarding distributions from retirement plans where death has occurred before the required beginning date (RBD) of required minimum distributions is false. The false statement is: A) A spouse must take distributions over the spouse's remaining single life expectancy, beginning in the year following the year of death. This is incorrect because, while a spouse can choose to take distributions based on their own life expectancy, they also have the option to roll the distribution over into their own IRA and delay distributions until they reach their own RBD.

Options B and C are correct statements. A nonspouse beneficiary can indeed perform a direct trustee-to-trustee transfer to create an inherited IRA, and a spouse can rollover the distribution into their personal IRA without taking distribution until their RBD. Lastly, option D is also correct as an estate beneficiary is subject to the 5-year rule for taking distributions if the deceased had not reached RBD.