First, a non-spouse beneficiary (or a same-sex spouse, who is considered a "non-spouse" for Federal purposes), who inherits qualified plan assets, such as a 401(k) or a 403(b), can now roll over his or her interest into an IRA. This allows for the continued tax deferral of all accumulation until distributions are taken. Previously, when a non-spouse inherited assets from a qualified retirement plan, the non- spouse was forced to withdraw most if not all assets immediately, triggering a large tax liability.

Second, the new law now allows 401(k) hardship withdrawals for hardships and unforeseen financial emergencies with respect to any person who is listed as a beneficiary under a 401(k) plan. This means that if your partner/spouse is listed as your 401(k) beneficiary and he or she experiences an unexpected financial emergency, you can potentially withdraw money from your 401(k) for these expenses. Previously, this provision was only available for hardship expenses relating to legally recognized spouses and dependents.

Finally, non-spouse beneficiaries will now also be able to apply for waivers of the 60-day rollover period. This means that if you request a hardship from your former employer's 401(k) for purposes of an unforeseen emergency on behalf of your partner/spouse beneficiary, and you cannot deposit the funds in an IRA within 60 days, your non-spouse beneficiary can apply for a hardship waiver that extends the deadline beyond 60 days. Previously, a non-spouse beneficiary could not receive a 60-day waiver from the Internal Revenue Service.

This event is a collaboration between Boston.com and the Financial Planning Association of Massachusetts.

Please RSVP by September 1, 2006 and let us know who you will be bringing.