The participant's family has spoken with a lawyer (presumably an estate lawyer), and he said that any assets would have to go through probate unless a check is reissued. My thought is whoever is the default executor of the individuals' estate (no will is known of, and this is the only significant asset) should be able to deposit the check in the participant's name into the deceased participant's bank account, and then the funds could be accessed by the spouse (presuming she has access).

Thoughts on my/the participant's family/the lawyer's reasoning?

Would the new wife automatically become beneficiary of his retirement plan upon being married 1 year, unless the participant obtains a spousal waiver?
Is a spouse the automatic beneficiary of his IRA's as well?

The husband would rather not broach this less-than-romantic topic with his new spouse if he doesn't have to! 😉 

Thanks

Any reason why they should not be?

Thanks

The bank says it cannot do a direct spousal rollover. Instead, they want to roll over to an account for the Estate, and then the spouse can get it.

Would she then be able to roll the proceeds into her own account? Would it be considered an inherited IRA or would it become hers as a spousal rollover? Obviously there are significant tax and RMD implications, etc.

Thank you

I know a tiny bit about accounting, and I have a potential client (architect) who wants to reduce his RE by opening a Profit Sharing/Cash Balance combo.  He's 59 years old.

Advice?  Knowledge?

Thank you!

My gut reaction is that the plan should simply refuse to pay until this is straightened out, and file an interpleader action if one of the parties sues for benefits.  But has anyone seen any guidance as to whether a beneficiary designation not received until after death can be honored?

The 100% owner of the company sponsoring the 401(k) plan died.

In this particular plan, they had self directed accounts for salary deferrals and a pooled account for all employer contribution and rollover sources. The 100% owner never contributed salary deferrals and his account balance 

The 100% owner did roll over a large portion of his overall benefits from a defined benefit plan that terminated about 5 years ago. About 60% of the pooled account is comprised of private investments (trust deeds, partnerships etc.). I am a little worried about the timing requirements of death benefits being paid to his spouse as his primary beneficiary. We think it may take some time to unwind some of these private investments.

The plan document does not seem to address when death benefits need to commence. The 100% owner just turned age 72 this year.

In general, we have always heard of death benefits being paid by the end of the year of the participant's death.

Is there specific timing on when benefits must be paid?

Thanks.

There is a will directing how the Estate is to be distributed.

Do the plan assets get paid to the estate, and then distributed accordingly?

Can any relatives (or even non-related beneficiaries) roll to IRA's? Any other tax advantaged methods of distribution available?

Thank you in advance for your help with this!

HE and SHE are considering becoming Husband and Wife.  Second marriage for both.  Both have adult children from first marriage.  Both age 70.  Both have investments that fall into the common categories:

a)   individual investments, such as stocks, bonds, mutual funds, none of which are part of an IRA or qualified plan.

b)   small cash accounts (checking, savings, CDs).

c)   retirement accounts, including all of the following: traditional IRA, Roth IRA, 403b plan (governmental), and 401a plan (ERISA-covered).  All retirement accounts are individual accounts, not defined benefit.  None of these accounts have reached Required Minimum Distribution.  All accounts existed long before HE and SHE met each other and have no potential beneficiaries other than children.  There are no real or potential QDROs.  All current accounts have named children as beneficiary(ies).

d)   There may be other property with small (but non-zero) value such as vehicle, artwork, real estate, antiques.

Both parties want the following to happen:

• Current retirement accounts will not be commingled.
• Upon the first to die, the retirement accounts and investments of the deceased will remain in existence and the income (and/or RMD) will be payable to (for the benefit of) the survivor.  The principal of the retirement accounts and investments would NOT be available to the surviving spouse unless the spouse's investments become exhausted.  Non-investment property (i.e., items that do not produce income) of the first-to-die (such as a car) might remain with the surviving spouse or go to the surviving children of the deceased (to be determined).
• Upon the death of the second, the ownership of all remaining investments (in all categories above) will pass to the children of the original owner.  For example, if HE dies first, at the time SHE dies, all of HIS investments and IRAs and accounts will become owned by HIS children, and all of HER investments and accounts will become owned by HER children.

What method(s) can be used to accomplish this?

Would the marriage automatically alter any beneficiary designations in effect for any of the above investments or accounts?

Does it require both pre-nuptial and ante-nuptial agreements to document the intent and actions?

What have I forgotten?

Thanks. 

Client set up a living trust and then dies a few years later.  There are 2 beneficiaries of the trust (two of the client's three children).  Upon the death of the client the Trust named the youngest of the three children, who is not a beneficiary of the trust, as Trustee. All goes well for a few years. The now trustee (and youngest of the three children) develops some health issues which focuses the attention of the beneficiaries on the successor Trustee provisions of the Trust.  

The Trust names one of the other children (who is 1 of the 2 beneficiaries) as Trustee if the youngest of the three siblings dies or is unwilling to continue in her role as Trustee. 

Nothing further is specified in the Trust as far as Trustee succession goes.

Assume that (1) the youngest of the three children dies; and, (2) the named successor Trustee acts as Trustee for a few years; and, (3) the named successor Trustee dies.

The Trust doesn't contemplate this sequence of events.  There doesn't appear to be any provision in the Trust that grants the remaining beneficiary Trustee authority. 

The trust holds two assets: an investment account at a national brokerage and an annuity issued by a large insurance company. Both the brokerage firm and the insurance company have a copy of the Trust itself.

Assuming the above, is there something that the named successor Trustee should do (after the youngest sibling dies but obviously before her own death) so that the brokerage firm and insurance company understand that, upon her death, they should listen to the remaining beneficiary for all things they would otherwise look to the Trustee for?

Does Maryland trust law have a provision that says if a trust becomes trustee-less that trustee powers automatically vest in the remaining beneficiary?

TIA

me22

• surviving Spouse;
• children, per stirpes;
• surviving parents, in equal shares;
• estate.

My overall question is - under current regulations, is a defined benefit plan permitted to make a distribution to an Inherited IRA (via direct transfer) to a non-designated beneficiary?

If yes or maybe, does it matter who the non-designated beneficiary is?  We have the following true scenarios to deal with:

1. Terminated Participant A (died age 64 before NRA) has a surviving Spouse, and the distribution amount is over $5000.  Also, the plan is terminating.
2. Active Participant B (died age 32) only has one minor child, and the distribution amount is under $1000.  The plan is ongoing.
3. Active Participant C (died age 56) only has surviving parents (both older than age 72), and the distribution amount for each parent is between $1000 - $5000.  The plan is ongoing.
4. Terminated Participant D (died age 64 before NRA) has no Spouse, no children, nor any surviving parents, so his estate will receive the distribution; and the distribution amount is between $1000-$5000.  Also, the plan is terminating.

All participants were 100% vested at termination or at death.  NRA = Normal Retirement Age as defined by the plan.

In addition, these participants were also in 401(k) plans sponsored by the same Plan Sponsors as the defined benefit plans.  Does your answer to any scenario change depending on the plan type?

I think the answer for all four scenarios for both plan types is: No, none of these non-designated beneficiaries can elect to direct transfer their distributions to an Inherited IRA.

If I'm reading the Inherited IRA rules and plan document correctly, the reason none of these scenarios can result in a direct transfer to an Inherited IRA is because none of the beneficiaries were designated as beneficiaries by the Participants.  However, I rarely need to handle distributions due to death, so I am seeking input from more knowledgeable retirement plan practitioners.  Thank you for your help.  

There are employees in the plan.

5500SF due 10/15.

Wife of deceased trustee can't find assets.

Any suggestions on what I can do (third party admin).

Obviously, it does not have all the advantages of the stretch, but it does provide for tax deferred growth and income stream beyond the 10 years.

Thoughts? 

Seeking advice....my father retired two years ago and start receiving his pension from a labor union, which is 100 percent funded by employers. I am the only child, he is single, and I was left with a large burial bill, property taxes, and other estate bills. I discovered he changed his beneficiary on his pension to a friend, who will start collecting his monthly pension. Is there anything I can do at this point to receive his pension? Override the beneficiary or Obtain a DRO to assist with the expenses?      

The spouse was appointed as Representative of the Estate. As such, she signed paperwork with investment companies to become the authorized signer on the accounts and did distributions to the other participants.

Spouse also has an attorney helping her with the estate, and the attorney says she does not have the authority (nor will they recommend she take on the authority) to sign the amendment to terminate the plan (since the business no longer exists). Side note on the plan - the deceased owner may have had some prohibited transactions involving the assets of the plan. We are thinking that the attorney is trying to protect the spouse from dealing with this.

The two actions seem contraditory to me.?? Either you have the authority to approve distributions AND to terminate the plan, or you cannot do either. Yes, No?

Would the plan have been considered an abandoned plan? Is there something in the regs that I can cite with this attorney to explain the spouses position here?

Thank you in advance for your help!

sole proprietor as entity type. sole proprietor

participant dies in service before retirement age.

sole proprietor has no will(i.e., dies intestate).

does suriving spouse automatically have the power to

assume all functions of plan sponsor and plan administrator?

Owner dies suddenly without election. Default option is 100% J&S.

Question: What is the value of the DB plan to be included in his estate?

Is it $0?

Thanks.

44 year old is sole beneficiary.

HOW DOES THE IRA OWNER ASSURE THAT THE BENEFICIARY TAKE WITHDRAWALS BASED ON LIFE EXPECTANCY?

I would appreciate any info you have.

Does anyone know of any PLRs or other guidance that would allow the spouse to be treated as the beneficiary; effectively looking through the estate to the ultimate beneficiary of the proceeds?

(I already told them to double/triple check for papers and/or a default beneficiary.)

my banks trust department position is "From the plain language of "proceeds", the trust document directs a cash out of the IRA be4 it is transferred to the residual trust. the bank wants after tax money to go to residual trust . end result- large tax is due now.

do you agree with the banks interpretation of the top sentance. everywhere i read from private letter rulings and on seem to permit non-spouse beneficiaries to open inherited iras thereby keeping funds under the umbrella of the ira.

please ask if you need more info. im not a professional but have a real life situation.

PS. is the banks interpretation of the phrase " ira proceeds" even applicable in the context of my situation? just their definition seems strange.

That he can roll his IRA into a Profit Sharing Plan (this will need to be set up), then use the funds in the PSP to purchase life insurance (1 premium payment), and then an Irrevocable Trust can purchase the life insurance from the PSP (at its FMV). Thus, very little is left in the retirement plan to be subject to estate taxes and income taxes, and the life insurance pays out to the ILIT and avoids estate taxes.

To me it seems like a blatant tax shelter that the IRS would be all over, but just wanted to see if anyone had heard of this strategy. The strategy around it is fairly legitimate from what i can tell as they quote revenue rulings to value the life insurance, etc.

Any input is appreciated.

If I could find a family member I could get an Affidavit of Heirship completed but I have a couple of foreign nationals where this does not appear possible.

How has anyone else handled similar cases?

I would like to petition the probate court in the county of residence to either supply contact information for the personal administrator or, if the estate has not been filed with the court, to accept the life insurance beneficiary as the beneficiary of the estate comprised of the 401(k) balance. But it isn't worth the legal fees to hire an attorney in each jurisdiction. Eventually administrative fees will deplete the accounts.

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However, after reading this article, I really want to think this through and find out how to get the best “deal” (as much of a deal as you can get from going bankrupt..).

I am planning on taking the article’s advice and consulting with my California lawyer, but thought I could try to get some other opinions first, especially since I won’t be able to consult a Florida lawyer until after I make the move.

Which state’s bankruptcy laws are more favorable, California or Florida? And if Florida, any locals know of a trustworthy Tampa Bay attorneys I can consult with?

“Resolve to be tender with the young, compassionate with the aged, sympathetic with the striving, and tolerant with the weak and the wrong. Sometime in life you will have been all of these.” --Lloyd Shearer

Document allows spouse beneficiary to postpone payments until spouse would have been 70 1/2.

Questions:

1. Document requires that if spouse beneficiary wants to be exempted from 5-year distribution rule, they must make election in writing. Does anyone know if there is a form for this or what it should say?

2. I believe that we should still keep account in the participant's name, not put in spouse's name. Does that sound right?

Thanks!

I have a sister and brother and we haven’t talked about this yet. They live in Arizona and New York but I am guessing all would be based on California law.

“The best education in the world is that got by struggling to get a living.” - Wendell Phillips

I have three kids, and only one of them lives in California. So, I think I need to create some kind of living will and trust. My question is that if I create the living will and trust in California, will it govern my wishes in all other states? Will my kids be included?

My neighbor worked with James F. Sexton here in San Diego, has anyone heard of this Living Wills and Trust Attorney?