Common use of Eligible Designated Beneficiary Clause in Contracts

Eligible Designated Beneficiary. (Other than a Surviving Spouse or Minor Child). If your beneficiary is an eligible designated beneficiary who is someone other than your surviving spouse or your minor child, he/she has the option of taking distribution of the IRA assets over a single life expectancy period or within ten years. If such a beneficiary chooses the single life expectancy option to calculate his/her RMD, the life expectancy divisor used may depend on whether your death occurs before or on or after your RBD. If your death occurred before your RBD, the beneficiary uses his/her age at the end of the year following the year of death to determine the initial single life expectancy divisor and reduces this number by one for each following year's RMD calculation. However, if you die on or after your RBD, your beneficiary uses the longer of your remaining life expectancy, determined in your year of death and reduced by one in each subsequent year, or your beneficiary uses his/her life expectancy in the year following the year of your death, reduced by one for each subsequent year. If such a beneficiary chooses the ten-year rule, he/she is required to remove all assets from the IRA by December 31 of the tenth year following the year of your death.