Guest benefitsanalyst Posted January 10, 2003 Posted January 10, 2003 We have a deceased participant in a 401k plan and they did not name a beneficiary. Our plan states to pay the money to the estate but there is no estate being set up. Can we forfeit this money to the plan?
mbozek Posted January 10, 2003 Posted January 10, 2003 How do u know there is no estate? If a person dies without a will the relatives inherit the property through intestacy. If the heirs do not step forward the property is transfered to an administrator or other govt official who will try to locate the heirs. If there are no heirs then the property will escheat to the state. mjb
Guest benefitsanalyst Posted January 10, 2003 Posted January 10, 2003 There were heirs to the person's property, but the heir stated that they were not going to set up an estate because it was so small.
mbozek Posted January 12, 2003 Posted January 12, 2003 Huh? I have never heard of heirs turning down money. Usually they fight over small amounts. A heir can be appointed administrator of the decedents property with minimal cost. Some states provide for simplified administration of small estates. Did the decedent own any other property, e.g., car, bank account, home? If so some one has to be appointed representative to distribute the property. The plan admin cannot simply forefit the property because at some future time each heir can come in and file a claim for the benefits. I assume there is no spouse. mjb
Guest benefitsanalyst Posted January 13, 2003 Posted January 13, 2003 The deceased employee appears to have a child but they have not spoken in 30 years. The beneficiary under the company life insurance policy is a newphew and he is the one who is handling the estate.
mbozek Posted January 13, 2003 Posted January 13, 2003 Under most state intestacy laws the child would be the beneficary if there is no spouse but may have to share the benefits with the decedent's living parents. The nephew seems to be the administrator of the estate. If the plan forfeits the benefit the child could always come back and make a claim for the account balance with interest from the date of death. The only way to forfeit the benefit would be if a search through some locater service fails to locate the child. But then another heir such as the nephew may be entitled to the benefits under state law. I dont think it is permissible under ERISA for the Plan admin to get waivers and releases from the nephew and other heirs to avoid paying the benefit but that is a business risk. mjb
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