Planning Considerations

In light of the factors above, a Plan participant should always consider the following: The Beneficiary Designation Form Governs Participants routinely (and wrongly) assume that their wills govern the distribution of Plan assets. These assets are distributable to the beneficiary named on the form, or according to the default method in the Plan, regardless of the provisions of the participants will. Always Name a DB, if Possible As noted above, without a DB, the deferral of withdrawals from a Plan by either the participant or the beneficiaries may be severely limited or eliminated completely. Review the Plan Periodically, and Always Just Before the RBD The beneficiary designation should be reviewed at regular intervals, after a major life event such as divorce or a death in the family, and within the year before the participant reaches the RBD. The latter is particularly important, because it allows the participant to ensure that he or she will make the proper election regarding minimum distributions by the RBD. Advanced Planning If a participant has a large Plan balance or a complicated estate plan that involves, for example, distributing Plan assets to trusts for minor children or partially to charity and partially to children, the participant should consider working with an expert in this area to obtain the best tax planning advice.