Retirement account records and questions checklist

Start with beneficiary forms and plan terms

A retirement account generally passes to the person named on its beneficiary form, subject to spousal rights and the plan's rules.

• Collect the beneficiary designation effective at death, the account agreement and relevant plan terms.
• Include spousal consents, waivers and any relevant domestic relations orders.
• Retain records of beneficiary deaths, qualified disclaimers and complete benefit payments.

Ask which beneficiaries remain included under the beneficiary determination regulation and check its applicable deadline. A beneficiary's subsequent death alone does not remove that beneficiary from consideration.

The review deadline does not extend the deadline for a qualified disclaimer. Separate rules apply to trusts, certain annuities and a sole surviving spouse who dies before distributions commence.

Document beneficiary status at the owner's death

• Collect birth records and evidence of the beneficiary's relationship to the owner.
• For disability or chronic illness, gather evidence addressing the condition at the owner's death.
• For an employer plan, keep submission records and check the applicable documentation deadline in the beneficiary documentation regulation.

For a beneficiary age 18 or older at death, disability requires inability to engage in substantial gainful activity because of a medically determinable impairment expected to result in death or have long continued and indefinite duration.

For a younger beneficiary, the impairment must cause marked and severe functional limitations with the same duration requirement. A qualifying Social Security determination establishing disability at the owner's death also satisfies the disability definition.

Chronic illness documentation must include a licensed health care practitioner's certification. For an IRA, disability or chronic illness documentation need not be provided to the trustee, custodian or issuer.

Failure to document disability does not automatically eliminate another independently available eligible beneficiary category.

A child qualifying solely because they are the owner's minor child stops qualifying at age 21. The remaining interest must be distributed within ten years after that point.

Reconcile balances and distributions

• Gather the owner's death record and records establishing whether death occurred before or on or after the required beginning date.
• Collect prior year end balances and statements showing distributions already taken.
• Label inherited accounts with the original owner's name and identify each as Roth or non Roth.
• If a beneficiary has also died, retain that person's status records and the existing distribution schedule.

If the owner died on or after the required beginning date, any unpaid death year required minimum distribution must be paid to beneficiaries during that year. Death before that date produces no death year required minimum distribution.

A special allocation applies when an owner dies with an unpaid required minimum distribution and had multiple aggregated IRAs whose beneficiary designations were not all identical.

Each affected IRA must distribute its proportionate share of the remaining shortfall to a beneficiary of that IRA, based on the preceding year end balances. Allocation disregards any amount that IRA already paid toward the owner's requirement.

Calculate each inherited IRA's required minimum distribution separately. Permitted combined withdrawals are limited to accounts inherited from the same decedent, excluding the beneficiary's own IRAs and accounts inherited from another decedent.

Roth and non Roth IRA distributions cannot satisfy each other's requirements. The regulation separately permits an election involving an IRA annuity contract.

Before any proposed rollover, identify the required minimum distribution portion. That portion is ineligible for rollover.

Bring the actual trust documents

• Retain the trust instrument, relevant amendments and records showing the terms effective at death.
• Collect submission records for the instrument or a permitted beneficiary list certification.
• For multiple beneficiaries or trusts, bring account establishment records, allocation provisions and accounting records.

The plan administrator may determine which trust documentation alternative is available. Check the applicable submission deadline in the trust documentation regulation, including the specified surviving spouse rule where applicable.

A permitted list must include contingent beneficiaries and entitlement conditions. It must certify completeness and the specified trust requirements, with an agreement to provide the instrument on request.

A bare beneficiary list or generic certification is insufficient. For an IRA, the trust documentation need not be furnished to the trustee, custodian or issuer.

Ask whether separate account requirements and any immediate trust division requirements are satisfied. Do not assume that separate beneficiary names establish separate distribution treatment.

Preserve IRA basis and Roth history

• Collect nondeductible contribution records and Forms 8606 for inherited traditional IRAs.
• For an inherited Roth IRA, find evidence of the owner's first regular contribution or earlier conversion contribution.
• For a surviving spouse considering own IRA treatment, retain eligibility, election and distribution records.

Basis from nondeductible contributions remains with an inherited traditional IRA. Do not combine it with basis in your own IRAs or accounts inherited from other decedents, except when a surviving spouse treats the inherited IRA as their own.

If distributions come from both your own IRA and an inherited IRA and each has basis, separate Forms 8606 determine the taxable and nontaxable portions.

For inherited Roth distributions, death satisfies the death condition for a qualified distribution, but the five taxable year condition must also be met. The owner's death does not restart that clock.

The clock begins with the first regular contribution year or an earlier conversion contribution year and ends with the fifth consecutive taxable year. Corrective distributions are treated as never contributed for this purpose.

The inherited Roth clock is independent of your own Roth clock. If a surviving spouse treats the inherited Roth as their own, the earlier ending clock applies.

Two related terms

Eligible designated beneficiary: A designated beneficiary who, at the owner's death, is the surviving spouse, the owner's minor child, a qualifying disabled or chronically ill individual, or someone not more than ten years younger than the owner. Chronic illness requires certification of an indefinite, lengthy inability.

See through trust: A beneficiary trust whose beneficiaries are considered for distribution purposes if it is valid under state law, becomes irrevocable by death, has identifiable beneficiaries and satisfies documentation requirements. For an IRA, documentation need not reach the trustee, custodian or issuer.

Common questions