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Financial Planning / Tax Strategies
|Subject: Distribution - Disability vs. In Service||Date: 1/28/2001 6:35 PM|
|Author: klouche||Number: 45004 of 122853|
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.
What are the tax consequences for the estate and the beneficiary for either "X", "Y" and "P"?
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