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How to get out of a 419 plan


Guest HammerBeth20

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Guest HammerBeth20

I work in the 409A world. I have a potential client that has a 419 that is still around, and has some life insurance as a part of the plan. Is it even possible to start a 409A plan with that existing life insurance?

We typically build the plans from the ground up and have never had a situtation with already existing life insurance.

Thanks in advance!!!

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The 419 plan is, typically, a welfare benefit plan. Unlike retirement plans, there is virtually no certainty that the benefits will ever be received. For instance, in a 401(k) plan, you know you're going to get your benefit at some point in the future; even if given to your beneficiary. That is the nature of a retirement plan. A welfare benefit plan is different, in that you may qualify for a benefit under the items covered; and a mere severance from employment is not one of them.

I'm not sure if your case involves an AF(6) or a (e). But, this merely a broad understanding.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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Guest HammerBeth20

We are just trying to vet out all potential options. Want to do what is most advantageous to the client. I am working with minimal information currently, my partner has been in contact with the client, so I don't have all pertinent information.

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  • 3 weeks later...
Guest MaryAllen72

Hello there! I do not know how much help I can be but I do know of a firm that helped a dear friend with a similar issue with her 419 plan among a few other related IRS penalties she faced. They are located in Milwaukee but I discussed options with them in Detroit and my friend is in Florida. Maybe they could be of help or at least provide some guidance for you or your client? Mahany & Ertl was the name of the firm. Sorry I couldn't be of more help.

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  • 4 weeks later...

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