Article on Retirement Benefits in the Context of Estate Planning

Lewis Saret (Federal Tax Attorney, Washington D.C.) recently published an article entitled, Retirement Benefits in the Context of Estate Planning – Part III: Income Taxation of qualified Rollovers; Current Estate and Gift Tax Developments, The Estate Planner, (May 2012). Provided below is the introduction to his article:

This is the third in a series of columns that addressesretirement benefits in the context of estate planning. The first columndiscussed the minimum required distribution (MRD) rules that apply to qualifiedretirement plans (herein referred to as “QRPs”).1 The second column discussedincome taxation of payments from qualified retirement plans where the participantor account owner has basis associated with his/her QRP interest. This column isdivided into two parts. Part I discusses taxation resulting from qualifiedrollovers from one retirement plan to another, with emphasis on both QRP-to-IRArollovers and IRA-to-IRA rollovers.

Part II it discusses some important tax developments relevantto estate planning, including the transfer tax provisions included in PresidentObama’s FY 2013 budget proposal. Among other things, in Part I, this columndefines direct and indirect (or “60-day”) rollovers, outlines the requirementsfor valid rollovers, and explains, in general terms, the differences betweentaxable and nontaxable rollovers. Additionally, it discusses the specific taxconsequences imposed by rollovers, whether performed by the participant, thespouse, or a non spousal beneficiary. Future columns will discuss Roth IRAconversions, which are not discussed in this column.