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You don't know how hard it is to resist ......

All great advice. I'll also mention ERISApedia. A great resource, with some outstanding bells and whistles available. Furthermore, the knowledge and generosity of their time and expertise among the many participants on this board has helped me immeasurably over the years. While I'm at it, yet another thanks to Dave and Lois Baker for doing such a great job in providing this forum!

Probably not a CG. But remember, even though there is no family attribution from siblings, there could be, for example, certain options to purchase some or all of the other 21%, that would count as "ownership" for these purposes. Most CG determinations frankly don't seem to take into account such intricacies, which is why we always advise clients to seek legal/tax counsel before making the determination. Or at least do a deeper dive into the rules. P.S. I just read another post of yours where Cuse makes the exact same point with regard to options.

I’m not so sure. Even if it’s w-2 wages, an owner only plan isn’t subject to Title 1 of ERISA and that’s what drives the DOL.

Actual W-2 wage or a draw from an unincorporated entity? The prohibited transaction rules still apply but the deferral deposit timing might adjust if this is someone for whom all the income is actually realized only at year-end.

The Form 5330 is a separate matter from whether you can or cannot use VCP to address your delinquent contributions. Any employer who fails to timely deposit contributions resulting in a prohibited transaction must file a Form 5330 and pay the requisite excise tax. A failure to file the Form 5330 results in the continued accumulation of the excise tax - you must file a Form 5330 for the year of the failure and for each year thereafter until you've paid the tax. Look here for more guidance. https://www.irs.gov/retirement-plans/form-5330-corner You may be able to do a self-correction instead of a VCP. Self-correction is available for insignificant failures and certain significant failures. The Revenue Procedure states Insignificant failure - The requirements of this section 8 are satisfied with respect to an Operational Failure if the Plan Sponsor of a Qualified Plan, a § 403(b) Plan, a SEP, or a SIMPLE IRA Plan corrects the Operational Failure and, given all the facts and circumstances, the Operational Failure is insignificant. This section 8 is available for correcting an insignificant Operational Failure even if the plan or Plan Sponsor is Under Examination and even if the Operational Failure is discovered on examination Significant failure - The requirements of this section 9 are satisfied with respect to a significant Operational Failure or a Plan Document Failure if the Plan Sponsor of a Qualified Plan or § 403(b) Plan corrects the failure, and the correction is either completed or, in the case of an Operational Failure, is substantially completed (in accordance with section 9.03) by the last day of the correction period described in section 9.02 Look here for more guidance, including a link to the Revenue Procedure https://www.irs.gov/retirement-plans/epcrs-overview

Also, be careful of this. If dad has any exercisable option on stock owned by son he is deemed to own that as well. (e)Constructive ownership (1)Options If any person has an option to acquire stock, such stock shall be considered as owned by such person. For purposes of this paragraph, an option to acquire such an option, and each one of a series of such options, shall be considered as an option to acquire such stock.

I think the misunderstanding that many people have is that if the participant did not fill out a beneficiary form/designation, then the account is subject to the terms of a will, or if no will, then intestate rules. It isn't. 401(k) plans have default beneficiaries written into the governing plan documents, so that in the event a participant passes without a affirmative beneficiary designation, there is a default beneficiary. Typically that is something like spouse, children, estate, but it varies. Read the plan's document carefully. Even if the estate is where the benefits are to go - they go there because of the beneficiary rules in the plan document, not because of the application of a will or intestate laws. So If everyone else pre-deceases the participant (not what we have in this post) the estate is the named default beneficiary under the terms of the plan, and gets the $$ because of that.

I look at this one step at a time. When uncle dies, plan assets go either per a beneficiary designation *or* if none, per the terms of the plan. I would guess that the spouse (aunt) is the bene under the terms of the plan - so those assets go to her - whether she exercise control over them or not. Uncles will is irrelevant. Only a valid beneficiary designation or the terms of the plan govern. So, when aunt died, assets go per her bene designation (if any) or per the terms of the plan - and uncle, uncle's estate, and uncles trust have no bearing on aunt's distribution of her interest in the plan. Aunt's representative (estate) or others would be entitled to those benefits - absent some fact not disclosed. The court has NO JURISDICTION over the plan assets until paid, and cannot direct those assets to be paid to the trust, and whether it is a pass-through is really irrelevant..