As an estate planning attorney who works daily with clients’ and their living trusts, I frequently see clients with a fair amount of their net worth in IRAs and/or qualified plans. It is with that in mind that I discuss the following.

What the government giveth, it taketh away. In late 2008, then President Bush signed into law the Worker, Retiree, and Employment Recovery Act (WRERA) which contained a suspension of the law that requires a minimum distribution for both IRAs and defined contribution plans for 2009. It was a one year only suspension and the primary purpose of it was to not make individuals take a distribution because many of their accounts were greatly reduced due to great decline in the stock market in 2008.

Ed Slott, one of the preeminent IRA experts in the country, prepares a newsletter each month. In his April edition, he points out that the required beginning date for most individuals is April 1 of the year following the calendar year in which the individual became 70½. However, most of the time the taxpayer does not need to take a required minimum distribution until December 31 of that year.

Remember, RMDs will be based on the year-end balance of 2009 even though there was no RMD for 2009. This is true even for people who turned 70½ last year!