Death Benefit to trust

[Guest jetfaninmn]

Jane Smith dies. She has funds in a 401(k) Plan. Her beneficiary is the "Trust of Jane Smith". She has a four children. One is the executor of the will.

Who is the check made out to, where are her assets held, how are they disbursed and why would you make it out to a trust?

Thanks

[mbozek]

The plan must pay the designated beneficary, i.e. the trustee of the Trust for Jane Smith after the trust submits a request for distribution and provides a tax id #.

The check would be made payable to "John Jones, as trustee of the trust of Jane Smith" if an individual is the trustee or "XYZ bank, as trustee of the trust of Jane Smith" if an institution is the trustee. There could also be multiiple trustees as payees. The Trustee will instruct the Plan admin in how to designate the payees name.

The assets will be held in the trust fund managed by the trustee and will be paid out by the trustee in accordance with the terms of the trust. Payment from the trust will be separate from the distribution of assets under the will.