
Many clients save for retirement through a private sector employer retirement account, typically an Internal Revenue Code Section 401(k) plan, or an individual retirement account. If the client is married, they may name their spouse as the account’s beneficiary. But what happens if the client gets divorced and their divorced spouse is still named as the beneficiary of their IRA or employer plan retirement account? This is an issue that may affect many clients, given that 50% of marriages in the United States end in divorce.
The rules differ depending on whether the client has an IRA (covered by state law) or a private sector employer retirement plan (governed by the federal Employee Retirement Income Security Act of 1974 (ERISA)). And each type of account has its own set of complexities. That’s why Christopher R. Hoyt wrote not one, but two, articles on this topic. “So, the Ex-Spouse Was Still Named as the IRA Beneficiary?” p. 40, focuses on the different types of state laws that apply in this situation, and “So, the Ex-Spouse Was Still Named as the Beneficiary of the Employer Plan?” p. 45, details the ERISA requirements.
In “PLR 202506004 Clarifies Required Minimum Distribution Issues,” p. 31, Denise Appleby and Bruce D. Steiner address another common issue with retirement accounts: how to calculate required minimum distributions (RMDs) when a trust is named as beneficiary. And David S. Sennett gives us a “playful” take on the process for withdrawing RMDs from an IRA payable to a trust in “The Twin Pillars of Required IRA Distributions to a Trust,” p. 35.