Designated beneficiary can be defined as a person that will determine that how long a retirement plan for an employee can be act or survive as a tax free or tax deferred vehicle under the specific laws that govern different types of retirement plans. In most of the cases the designated beneficiary is a person however in some of the cases the designated beneficiary can be a trust that is particularly designated for certain individuals.
From the last few years especially since the year 2002 the laws that handle the specifications governing different retirement plans have became more complex. The laws associated with the distribution of a qualified retirement plan are also becoming more complicated and complex. According to these laws more emphasis is being laid on the condition that a beneficiary must be an individual and it must not be any trust or charitable organization. These laws are needed to be followed by every entity although there are a number of other less tax efficient ways of making these kinds of distributions to the entities.
Other Related Accounting Articles: