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URL:  http://boards.fool.com/distribution-disability-vs-in-service-14217772.aspx

Subject:  Distribution - Disability vs. In Service Date:  1/28/2001  6:35 PM
Author:  klouche Number:  45004 of 121565

Situation:

Person with terminal illness, a public sector teacher, still working, must decide how to configure retirement distribution for benificiaries. If person dies while in service a distribution "X" is awarded to beneficiaries.

If person goes on retirement disability before passing, then beneficiares get either the regular disability payments "P" or a lump sum "Y" which is 3 to 4 times "X". If person just plain retires, then beneficiaries get nothing.

Questions:

What are the tax consequences for the estate and the beneficiary for either "X", "Y" and "P"?

Thanks,
KevinL
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