Common use of Not a Designated Beneficiary Clause in Contracts

Not a Designated Beneficiary. A beneficiary that is not a 2. Earnings. Earnings, including gains and losses, on your SIMPLE designated beneficiary includes a nonindividual that is an estate, IRA will not be subject to federal income taxes until they are charitable organization, or nonqualified trust. If your beneficiary is considered distributed. not a designated beneficiary and you die before your RBD, such a 3. Ordinary Income Taxation. Your taxable SIMPLE IRA beneficiary is required to remove all assets from the SIMPLE IRA distribution is usually included in gross income in the distribution by December 31 of the fifth year following the year of your death year. SIMPLE IRA distributions are not eligible for special tax (the five-year rule). If you die on or after your RBD, such a treatments, such as ten-year averaging, that may apply to other beneficiary must use your remaining single life expectancy to employer-sponsored retirement plan distributions.