Most people think of wills and trusts when they hear the words estate planning. It is best to check with your tax advisor for details, as the mandatory distribution rules are complex. But how do you ensure your named heirs inherit what you want them to receive, despite the ERISA rules? Roll the funds into an inherited IRA. In this blog post our attorneys explain everything you need to know about ERISA beneficiary designation rules from a spouses rights to who collects the money after a divorce and what to do if your ERISA claim is disputed. By Emmy Freedman. David Fisher has a BA in history from the University of Montana, with concentrations in economics, journalism, and geology. Plans that are covered under ERISA include employer-sponsored retirement plans, such as 401s, pensions, deferred compensation plans, and profit-sharing plans. Please consult your financial, tax, or other advisors to learn more about how state-based benefits and limitations would apply to your specific circumstance. The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Next, let's review some of the top mistakes made with beneficiary designations: 1. If the retirement owner dies before the RBD and there is no designated beneficiary, then the retirement account must be distributed within 5 years after death. Simply list the primary and contingent beneficiaries of your choosing and allocate the percentage that each one should receive. ERISA protects surviving spouses of deceased participants who had earned a . ERISA, on the other hand, mandates that the person named by the insured employee on the beneficiary designation form remains a valid beneficiary even after a divorce. First, take your 25% tax-free cash lump sum before you turn 75. 93-406, 29 U.S.C.A. 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