mbozek

You need to check with the attorney for deceased's estate to find out who is the executor of the estate. Normally the executor would become the personal rep of the owners estate which includes both the business and the 401k plan and has the power to take all actions that the owner could take on behalf of the plan including termination and distribution of assets. As for who receives payment if there is no designated beneficiary, the executor needs to look at the plan terms to see what the succession of distribution is if the deceased was not married. Some plans provide for distribution of benefits to all children equally before the estate. If the estate is the payee the plan distributes the benefits to the the estate.

yes they can as in IRC 414(p)(7)(B) if the order is a QDRO.

Never seen a plan document that had signatures notarized. Every plan document/trust that I have ever seen has a provision that authorizes the Trustee to deposit a portion of the plan assets in a bank or financial institution supvervised by the federal or state government including non interest bearing cheking accounts to provide for disbursement of funds in cash which is all the authority that banks want to see. I would never want a bank with such a requirement to hold any funds for a plan because you dont know what other kookie rules the plan will have to deal with.

I dont understand how the "we assume no responsibility for montoring withdrawals" language can infer any legally enforceable right against the employer since IRS reg 1.403(b)-6(e) (7) provides that the employee can elect to take the MRD for one 403b contract from another 403b contract in order to satisfy the 401(a)(9) requirement in the same manner permitted for IRAs under Reg. 1.408-8 A-9. In other words there is no way for the employer to know if the employee is taking the MRD for one 403b contract from another 403b contract. It appears that an employee could take an MRD due under a contract established under one 403b plan from a 403b contract established under another employer's 403b plan.

Why not ask the accountant what he is talking about since obviously what was said was lost in translation? Maybe he means the 990 tax form that is filed by the employer.

No real answer just observations: If partnership filed an extension to file firm tax return by Apr 18 then date for making contributions is automatically extended and new checks can be issued. Are the returns you are referring to the returns of the partners who received the K-1? I have always wondered how a taxpayer proves a contribution is made on time if the only documentation is a postmark on the date the return is due. Does the financial institution keep the envelope with the postmark in its records? Or does the financial institution record the contribution for the prior tax year on its records which is accepted by the IRS? There is a case where the tax court accepted an affidavit from the taxpayer which stated that the tax return was deposited in a mail box before the due date over IRS objections. There are very few reasons why the checks have not been deposited or returned to sender: letter was lost in the mails- highly unikely but sometime letters are delivered after extended delay because letter was routed to wrong Post office zip code or PO box. letter with checks went to wrong department at bank where it is lost in some one's in box. Checks are being held by an employee of bank awaiting instructions from some fuctionary because they were not sent to correct department that deposits checks or there is no record of which account the checks are to be deposited to and person holding checks does not know who to contact. This is the most likely reason. Many times the employer sends the check to PO box of a bank with inadequate information on the account #s that are to to recieve funds or does not include a deposit slip.

If the plan wants to permit recovery of funds for restitution on account of embezzlement or conviction of a crime against the employer it is necessary to have such an exception to the non alienation rules in the plan document because courts do not like to add implied exceptions to non alienation provisions. One question is whether the provision would apply to offenses committed before the date the plan is amended. The other is whether state law prohibits such a recovery. Many states have laws prohibiting seizure of pension benefits by creditors with narrow exceptions such as fraudlent conveyance. I dont know if a pension plan seekiing restitution from a participant would be regarded as a creditor under state law. Garnishment is a procedure allowed under state law that is only available to a judgment creditor and may not be available to seize pension benefits.

Why a transfer agent would only accept a POA less than 6 months old is beyond me. If it it is valid when it is executed then validity continues until revoked or or the principal dies. What if the principal was incpacitated and could not execute a new POA? In many cases the agent does not accept appointment as attorney in fact untl many years after execution by the principal. The new NY POA form requires all third parties to accept a valid POA regardless of how old it is. The Third party can demand that the agent provide an affidavit that the POA is in full force and effect when they are asked to accept it. I would review state law to see if a third party can refuse to accept a valid POA executed under state law.

Limiting a POA to a finite period would contradict the purpose of executing a durable power of attorney which is to allow the attorney in fact to continue to act on behalf of the principal indefinitely without interuption under the powers delegated by the principal. Termination of a durable POA executed by an incapacted principal after a finite period would require that the agent expend the funds of the principal to be reappointed by a court which makes no sense. Limiting a health care proxy to a finite period make no sense because the principal will not remember to re execute it after expiration and it could not be used to carry out its intended purpose. The website of the FL Bar Association states that there are only 3 ways for a durable POA to be terminated: death of the principal, revocation by the principal and determination of incapacity by a court where the POA is not continued in force. I have reviewed POAs in other states such as NY and PA in force for 20 years which have been accepted without question. One valid reason for executing a new POA is when the state law on POAs change as it did recently in NY. However there may be valid reasons for not updating a NY POA to conform to the new law and execution of a new POA should be discussed with counsel. The Principal should recieve at least 3 original signed POAs (more if there are multiple attoneys in fact who must act together or if there are other circumstances such as sale of real estate by the agent) to avoid the need to contact the the attorney who drafted the POA. Most financial service co will accept a copy of a POA or will return the original POA after approving the transaction.

According to Pub 575, P 31 the 10% tax on distributions before 59 1/2 only applies to an eligible state or local government 457 plan to the extent that any distribution is attributable to amounts the plan received in a direct transfer or rollover from other retirement plans or an IRA.

Since the above case was decided fed courts have narrowed the application of preemption so as to exempt state laws of general application that do not single out retirement plans for state action. The CA case is Hattem v. Schwarzenegger (Yes Arnold), 449 F3d 423 (2nd circuit 2006) which rejected ERISA preemption as a basis to prevent collection of $6M in CA UBIT. If you google the citation you will get a number of articles on why ERISA does not preempt state tax laws of general application. There is a NY tax decision imposing NY UBIT tax on a retirement plan, In Re McKinsey Master Retirement trust, NY Tax Tribunal Dec 817551, 5/8/03.

What's the citation to the case. I never heard of such a theory using preemption for a plan I know that CA has imposed state ubit tax on an ATT welfare benefit plan. The question is could the gov entity take title to the property owned by the plan for a failure to pay taxes.

M: Some financial custodians ask for everything and settle for less. What they will accept will be up to the legal department to approve distribution using a copy of a POA. I would send the copy and see what they say. Most financial firms and banks will accept a copy of a POA; most request the agent sign an indemnification agreement. It would be highly unusual for an an attorney who drafted the POA to keep it in his possesson because a POA should held by the principal and available to the agent in case it is needed immediately (and also because the agent/spouse may not know who the attorney was who drafted the POA or the attorney may not be available). I always give original POAs (usually 3) to the principal and tell them to avoid giving out the originals unless absoutely necessary to avoid running out of them. Your step mom should contact the attorney to get the original POA. Also check to see if it is in an SD box or in the possession of another family member.

I dont understand what is going on here. The plan adminstrator cannot hold up payment of benefits that are legally payable to a beneficiary which are not subject to a claim by an ex spouse. Under the rules for QDROS when the benefits are payable the potential amount that the ex is entitled to is supposed to be segregated (deferred) from the rest of the participant's account when the DRO is received. The plan administrator has 18 months to review the DRO to determine if the order is a QDRO and pay the benefits to the ex. If the order is determined to be QDRO within 18 months after the benefits are deferred then the segregated benefits plus interest are to paid to the ex spouse. If the plan administrator has not resolved the issue of whether the order is a QDRO after 18 months or has determined that the order is not a QDRO then the benefits are to paid to the beneficiary of the participant. Period. The plan administrator cannot refuse to pay any amount due a beneficiary that is not subject to the DRO. You need to get the rules for QDROS from the plan administrator to see if the above rules have been followed. If the above rules have not been complied with or if more than 18 months has expired you should file a claim for the benefits that the ex requested under the DRO. As a separate matter you should immediately file a claim with the plan administrator for payment of the benefits of your late husband that were not subject to deferral (segregation) for possible payment to your ex, since those benefits are not subject to the claims of the ex. The plan administrator must respond to your claim in writing within 90 days. You need to have your counsel review the rules for filing a claim for benefits under section 503 of ERISA and reg 29 CFR 2560.503-1. You need to light a fire under the plan administrator by making him/her respond to your justified right to all benefits not segregated to the ex under the plan's QDRO procedure. You should also demand that the plan administror make you whole for any investment losses due the failure of the plan administrator to follow the QDRO rules or plan distribution rules for QDRO payments to the ex spouse.

If your mother was less than 70 1/2 in 2010 she would treat the IRA as her own by refusing to take the MRD as a beneficiary which would eliminate the need to take an MRD until she attains 70 1/2. See IRS Pub 590 P 18. I am assuming she is sole bene of the IRA.

The employer needs to file an amended 1099-R showing 0 amount eligible for a rollover and a W-2 for the year of distribution showing the amount distributed from the 457b plan as wages. Employer needs to inform Custodian that the rollover was in error. The employee needs to withdraw the 457 funds including interest from the IRA and file an amended 1040 including the 457 amount distributed and earnings as taxable income and file an 5329 for the 6% excise tax for over contributing to an IRA for each year the funds were in the IRA. Employee needs to consult tax advisor to make sure that the distribution is not taxed twice or whether the staute of limitations (3 or 6 years) would prevent taxation.

Almost all IRAs have been amended to provide that the spouse is the default beneficiary if there was no designated beneficiary at death. As for your Q see plr 200644031.

The attorney should have advised the client to amend the plan to provide for an automatic lump sum payout upon termination without the participant's consent. See reg 1.411(d)-4 Q-2(b)(2)(vi). I think it is too late to amend the plan after termination. See example 1 in the reg. The only option is to roll over the fund to an IRA assuming you can find a custodian that will take the funds at this time, e.g. after termination. Q- does the plan need to have a provision that requires an involuntary transfer to an IRA upon termination?

According to IRS Pub 901 P 11 there is no exemption from income tax for US pension benefits paid to a Polish citizen. Benefits will be subject to 30% withholding rate. Bene needs to get a tax id no. from the IRS in order to make payment.

First q is are you subject to US income tax. See IRS Pub 901 for tax treaties between US and foreign countries which may exempt you from US income tax. Pub 901 is available free at irs.gov. If you are subject to US tax then the roth conversion is taxable income and you claim available deductions and exemptions. You can claim up to a $3,000 deduction from a prior year's capital loss against your taxable income. You should consult a tax advisor for provisions applying to non resident taxpayers.

The assets are only subject to the claims of creditors during the accumulation period. Upon severance of employment the participant may roll the money over to an insurance company for the purchase of an immmediate payout annuity. There is no rollover option for a 457b plan of a non profit employer. Assets can only be transferred tax free to another non profit 457b plan. Only assets in a government 457b plan can be rolled over tax free to an IRA which can purchase an annuity.

The conversion election for 2010 affects only amounts converted in calendar year 2010 and allows for 50% of the converted amount to be included as income in 2011 and 50% in 2012. Pre tax funds converted to a Roth IRA in 2011 will be taxed as income in 2011 along with 50% of the amount converted in 2010 which could result in a significantly higher federal and state taxes being imposed on the combined amount of both conversions.

This reminds me of the question if a tree falls in the forest and no one hears it, is there a sound?

An annuity benefit is required for all money purchase type plans, i.e., those with a fixed employer contribution requirement, say 5% of comp. Plans that provide for discretionary employer contributions each year where the contribution rate can vary are considered to be profit sharing type plans which can provide the benefit in a lump sum without the need for a QJSA or spousal consent.

If you are asking if the surviving spouse who is the beneficiary can roll over the 403b plan assets of the deceased spouse to his/her own 401k plan the answer is yes. See Pub 571 P 14.