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Affidavit of Heirship


Guest meggie
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Guest meggie

A participant died and willed his 401k benefit to a friend. The friend subsequently died and left no will. At the time of the friend's death, she had 3 surviving children and a grandchild of the a deceased child who predeceased the parent. The "Affidavit of Heirship" includes the 4 children as heirs (3 living and 1 deceased) and the one grandchild. If their is no designated beneficiary for the pension plan (i.e. just the estate), should the plan administrator rely on the "Affidavit of Heirship" in allocating the pension?

Thanks

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You should go kick the author of the plan document that did not provide for a clear and practical disposition of death benefits. Or perhaps you should check the plan document to discover it is not so bad. A decent one would not let anyone "will" a benefit. Benefits are paid to designated beneficiaries. If there is no designated beneficiary, the plan should identify the recipient. Usually, an estate (of the participant or the designated beneficiary) is one of the default recipents.

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There are three ways for the PA to proceed:

1. Determine if benefits can be transferred by will under state law. In that case the Plan Admin can pay the benefits to the estate of the friend. The property can be transferred by intestacy to a representative of the deceased who is apointed by a court act as administrator of the deceased's estate or to a public official who is apppointed to act as administrator of the deceased estate. The risk to the PA is that an heir to the particpant may appear and make a claim to benefits as provided under the terms of the plan.

2. Follow the terms of the plan which provide for payout where the participant does not have a designated beneficary at death. Under supreme ct precedents, state intestacy laws should be preempted. If the plan states that the benefits shall be paid to the estate of the deceased then the benefits should be paid to the personal representative of the estate of the participant as provided in 1 above.

3. Conduct a search for all of the heirs of the participant and then commence an action in interpleader in federal district court naming all of the heirs of the friend and the participant as defendants. The court will determine who is entitled to the benefits. If no heirs can be found then name the administrator of the participant's estate as the defendant. The plan would have to pay for the cost of the search and the filing of the complaint but there will be no risk of a missing heir coming back later to make a claim for benefits.

I dont know what an affidavit of heirship is and I would be wary of making payments to any one other than the representative of the estate of the participant or the friend unless there is a minimal amount involved since the PA can never be sure that all of the beneficaries of either of those two parties have been identified. Let the personal reps be responsibile for finding all of the heirs.

I think this matter should be referred to counsel for advice.

mjb

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  • 4 weeks later...

Just out of curiousity, How much time elapsed between the deaths and why were the funds not yet distributed to the beneficiary under the will ? Did the Probate Court approve the will and distribution to the beneficiary?

I also wonder what an "Affidavit of Heirship" is and does it supercede or pre-empt your state intestacy etc laws?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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