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my dad passed a few months ago, somewhat unexpectedly after a brief but serious illness, so my siblings and I are dealing with the aftermath of not having everything wrapped up in a neat little ribbon. he had an IRA that was paying him a small monthly installment to cover his annual RMD. my mom wanted to transfer the IRA to her own and continue getting the monthly installments, but the custodian is telling us there was no beneficiary designation on file (what? hard to believe my dad didn't do this!) and the only default is to an Estate, and taxable. why wouldn't it be to a spouse? I deal mostly with qualified 401k and retirement plan distributions so an IRA is out of my field of expertise. we continue to search for old documents at the house, but in the meantime am looking for some guidance. is this normal for an IRA? it doesn't make sense that mom will have to get an attorney and set up an estate, go thru probate, have to pay taxes (and legal fees!), etc. thanks!

Hello all, I have an interesting problem that doesn't seem to quite fit into some others that I've found here while searching. Here's the situation: We are a RK vendor for part of a non-ERISA 403(b). A participant died naming her spouse as her primary 100% beneficiary and her parents as 50/50 contingent beneficiaries. Her spouse died 2 days later. Initially, we believed that he passed without having made a designation himself. Per the plan document, the default is spouse, then estate. This would mean his assets now belong to his estate, who wants us to roll it over into an IRA the estate seems to have setup (I know this isn't correct, but it's a topic for another post). It has since been discovered that the spouse was a former participant of the plan on his own and he did have a beneficiary designation dated in 2009. His form named his spouse as 100% primary and his brother as 100% contingent. He took a full distribution of his account in 2016. The TPA firm, and to an extent the client, is trying to say since he took a full distribution years ago, his beneficiary form is basically null and void as the account was 'closed'. The beneficiary form doesn't have any language that would nullify it except upon receipt of a new beneficiary form. My opinion is that his beneficiary form is still valid and in force regardless if he cashed out previously or not. It'd be no different than if someone left service, took a full distribution, and then ended up with a non-elective contribution 8 months later but died in the interim. I've tried digging through IRC and even the EOB trying to find any guidance and have not come up with anything concrete enough to prove my point. Has anyone seen anything like this or have any other places to try looking?

has anyone had a situation where the named beneficiary is not a US citizen or resident? I'm not sure what to use for a taxpayer ID number or whether I should be advising this person that they will have to file a US income tax return, as the funds being paid out are coming from a qualified retirement plan (not individual) where the participant lived/worked in the US and had an SSN. unfortunately he passed away unexpectedly following retirement and we didn't have a chance to pay him out directly. now dealing with a family member outside the US who is non-english-speaking and I have no direct contact information other than thru the prior employer.

My mom had a Pension. A QJSA. She divorced in 2006 and retired in 2011. In her divorce they each retained their own retirement acts. Free and clear from any claims of one another. Through her employer I was her beneficiary on her life ,ad&d, 401k while she was working. She has passed and the company said the beneficiary had been notified without another word spoken to me. Her attorney said that state law (Ohio) predeceases the ex in retirement plans with decree which she thought all would go to me (pension and other acts) I am her only child. Now, her employer said I was not the beneficiary although I showed them paperwork that I was, which was done at her retirement in 2011. EVEN THOUGH THEY NOW SAY, after 5 months of back and forth, that I’m not the beneficiary they want me to send in her death certificate? It does not make any sense. Not only am I dealing with the death of my best friend but her employer is making me feel like crap to be honest. It’s all so very sad and don’t know what to do at this point. Do I just give up? Do I let it go? My mom did not want him to have anything because he had his own and it was always her intentions for me to have her acts. I was also her power of attorney and we had bank acts together. I have taken a full notebook of notes with the conversations I have had with her benefits center and Human Resources. Any insight would be appreciated. Thank you so much! Quinan

Question #1 - Under the provisions and requirements enacted by the Secure Act for 2020 and beyond, if an IRA owner dies in 2020 or after, and was past their RBD at the time of their death, must a designated beneficiary (who does not qualify as an eligible designated beneficiary) continue to take an annual RMD beginning by 12/31 of the year following the death of the owner, but then also deplete the account by the end of the 10th year after the death of the owner? Internal discussions in my workplace differ, some saying the RMDs are suspended at the owners death, and that the beneficiary can let the balance sit untouched for the 10 year period. Others, believe RMDs must continue but account must be depleted at 10 years. Question #2 - If an eligible designated beneficiary or designated beneficiary (if the answer to #1 above is yes) fails to take a RMD, by the required date after the owner's death, is it merely a failed RMD subject to the 50% excise tax/penalty for the shortfall, or do their payout options default to something else, like the 10 year rule?

A client has insurance in a defined benefit plan which names the sponsor as beneficiary. One of the insureds died and the benefits were paid to the sponsor consistent with the beneficiary designation. Intuitively, I believe that having a beneficiary other than the plan, itself, represents, at minimum, a prohibited transaction. I have been unable to find any citations or guidance to support this. Does anyone have any insight here?

Good morning to all. A client passed away last fall, and her sister popped up recently claiming to be the executrix of the estate and heir to all of the client's assets. We as the TPA do not keep beneficiary forms on file for any of our clients. We inform them at the moment of engagement that they must be responsible for keeping up with the forms in their own offices in the employees' personnel files or something similar.. The sister of the deceased says she has not found a beneficiary form. She says the deceased was divorced and that the ex-husband is deceased, and that they had no children. So far all she has provided to us is a death certificate for the deceased and a "Letters Testamentary" document with one sentence naming her as the personal representative of the estate of the deceased. She is now pushing to have the deceased client's assets transferred to her. The account balance of the client is held in an individually directed brokerage account with a well-known national brokerage house. The plan document says that in the absence of a beneficiary form, the assets go first to the spouse, and if none, to the children, and if none, "such other heirs, or the executor or administrator of the estate, as the Plan Administrator shall select." Bear in mind that the Plan Administrator was the client, who is dead. 1. To what extent are we as the TPA responsible for determining that the spouse is indeed an ex spouse, that he is indeed deceased, and that they had no children? 2. Is more paperwork required that just this one liner naming this woman as the personal representative of the estate required to establish her as the executrix/personal representative? 3. Is this our problem or the brokerage house's problem that holds the funds? 4. Do we have to worry about being sued later if she lied to us and there is a current spouse/children? 5. Can the account be rolled directly to her without passing through the estate in this circumstance? This is a first for us, so any experiences you can share/advice you can give will be greatly appreciated. Thanks in advance.

I have a deceased participant, no designated beneficiary, and no spouse/child/parent. We have been making RMD payments to the Estate for several years, and the participant’s brother is the executor (and plan trustee), so he gets the RMD checks and deposits to an estate account. I should probably say this is for a qualified retirement plan, not an IRA. The Plan is now terminating, so the financial advisor is looking to help him roll over the full balance , but is having trouble with what type of rollover account is acceptable (his own firm is questioning). Most literature indicates that non-spousal beneficiaries may only roll to inherited IRA. How does one establish an "inherited" IRA when no designated beneficiaries exist in the first place? Thanks for any input!

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?

I have a non-ERISA DB plan with a participant that completed a beneficiary designation prior to passing away. His designation identifies multiple beneficiaries all at 100%. One of those beneficiaries has submitted a claim form stating that he believes he is entitled to a 100% benefit. What guidance is there on beneficiary designation for a non-ERISA plan when the designated beneficiary is unclear? Any additional thoughts would be appreciated.

My husband was the alternate payee as a result of a QDRO from his first marriage, from a Defined Benefit plan/ Separate Interest. At the time the divorce was finalized (1985), he assigned his sister as his beneficiary, long before we met and married. He could commence receiving his pension when the ex reached her minimum retirement age, which would be Dec 2014, he requested the documents to start the process to receive payments, but he died last month (sept), the documents arrived 2 days after his death, he didn't get a chance to sign them and assign me as his beneficiary. Since he never withdrew his portion of the contributions plus interest, there is a balance. As I read through the documents, it says that if less than three years of benefits have been paid out, his beneficiary will receive the remainder of the contribution and interests in the event of his death. We married in 2002.A couple of times he contacted the pension plan to add my name as a beneficiary but was told he couldn't do it until he started receiving benefits. it was his wish that I should be his sole beneficiary, not his sister. Will that initial QDRO assignment of beneficiary pose a problem for me to claim this balance? Where do I stand now? Please help. Thanks

A pension plan pays the benefit due each month on the last day of the month. When a retiree dies, his last check is issued instead to his beneficiary. Plan benefits include after-tax contributions. Is the retiree or the beneficiary taxed? How should the plan handle 1099-R reporting and withholding? Thank you.