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Decedent had no designated beneficiary


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Participant dies and has no designation of beneficiary form.  The participant's spouse died 15 years ago.  The plan document provides for default beneficiaries as first spouse, if no spouse, then children equally.  There are 2 children.  I believe the 2 adult children are to both receive 50% of the participant's account.  The plan sponsors asked if this should go through probate.  It never entered my mind that this would go through probate since there are living children.  I'm not a lawyer.  I started to doubt myself.  I did a little research and it does appear that this would not go through probate.  It's not a large amount but still - need to be sure.  The plan administrator (doctor) would make the decision on this - but of course looks to us as TPA to tell them what to do.  Comments?  Thank you in advance.

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I have never seen this fact pattern go to probate.   The real risk is making sure there really are only two children.  If there is a 3rd or more out there they can make a claim on the plan after the benefits are paid.   That will be a real problem.  So make sure there are only two kids. 

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31 minutes ago, ESOP Guy said:

I have never seen this fact pattern go to probate.   The real risk is making sure there really are only two children.  If there is a 3rd or more out there they can make a claim on the plan after the benefits are paid.   That will be a real problem.  So make sure there are only two kids. 

Agreed.  A plan default bene des is every bit as legit as a written bene des.

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Too the extent that the benefits go "directly" from the plan to the children, there are no assets that are probateable.  Keep in mind that plan benefits are not "assets" of the participant until distributed (legal title to the assets are held by the Trustee) and consequently upon death, the account is not part of the decedent's estate - and the probate court has nothing to do with them (of course, unless the plan provides that the benefits go to the "estate.")

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Overall, I agree with what MoJo has had to say. If there is a living beneficiary (whether as a result of a designation or by default), the entitlement to the account goes directly to that participant. If, however, the participant's estate is the beneficiary, then the account would be treated as a probate asset.

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On 6/8/2021 at 6:06 AM, Tom said:

Participant dies and has no designation of beneficiary form.  The participant's spouse died 15 years ago. 

I agree with everyone's comments but want to make sure. When you say the participant's spouse died 15 years ago, i'm assuming that the participant's spouse pre-deceased the participant and the participant didn't die 16 years ago. Because that would change who the beneficiary is and the probate requirements.

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