No beneficiary

[k man]

a participant died without a beneficiary designation. the decedent has no heirs except for a brother. according to the plan the money gets paid to his estate. the size of the account is small and we doubt there has been a probate case set up. what are you supposed to do in this case with the money?

[Guest mjb]

If state law provides that the brother is the sole heir of the decedent's estate because there are no other living heirs, pay to bro and get release from him that it is paid to him on behalf of estate.

[k man]

good suggestion. i need to confirm that there is no dispute amongst heirs. ie. that bro is the only one.

[jpod]

Whether an amount is "small" is in the eye of the beholder. If the employer is willing to take the risk that it may have to pay the amount again out if its own pocket (for example, to creditors of the decedent, or to one or more heirs if the brother isn't really the sole heir), then distribution to the brother with a release might be a reasonable approach.

Otherwise, consult with legal counsel knowledgeable about estate administration in the decedent's state.

[jevd]

Have brother check out small estate law under the probate law in the state. There is generally a form to complete for estate beneficiaries to claim assets without goin through probate.

[Guest mjb]

jpod: The cost of the legal advice on estate administration would probably cost the plan more than the amount of the benefits. Non probate assets are exempt from claims of creditors of the deceased in many states because a claim against the employee expires at his death (and it is unlikely that creditors ever find out about the plan benefits in any event).

[david rigby]

good suggestion. i need to confirm that there is no dispute amongst heirs. ie. that bro is the only one.

Why does the plan/PA need to make such inquiry? Does the plan need only reliable identification of the executor?

[k man]

an executor has not come forward. i dont think there has been an estate opened.

[Guest mjb]

Executors are only appointed if the decedent had a will (it cost money to probate a will) to dispose of property owned at death. Otherwise an administrator will be appointed by the court if there is property that was was not bequeated to another person ( e.g., a home in the decedent's name). If all of the decedents property was designated to a beneficiary, e.g., LI, retirement benefits or surviving joint tennant, there will be no need to appoint an administrator or probate the will.

[GBurns]

K man

You might want to check to see if an estate has to "opened". I thought it existed by default as of death of a natural person.