non-spouse beneficiary -reassign payment?

[PFranckowiak]

401(k) Plan

Beneficiary on record is deceased participant's friend

Friend doesn't want the death benefit from the plan - want's the deceased children to receive the benefit.

Is she allowed to reassign the benefit to the kids so the plan pays the kids directly?

If yes - what do I need to have her do to accomplish this.

Thanks

PF

[QDROphile]

Probably the most productive inquiry is whether or not a disclaimer of the benefit will work.

[Bird]

I'm not sure that a named beneficiary can disclaim plan benefits (I don't think so, unless the plan permits it), but I'm sure the beneficiary can NOT reassign the benefits to someone of his or her choosing.

If it's not a giant amount, the named bene may want to simply accept the proceeds, keep enough to pay the taxes, and then gift the rest to the children. Anyone can give anyone else up to $12,000 without any estate or gift tax consequences.

[jevd]

Generally speaking a beneficiary can disclaim benefits under IRC 2518 if the diclaimer is executed within 9 monts of death. The plan would then treat the beneficiary as predeceasing the account owner and the plan language would dictate.

[masteff]

PFranckowiak - The beneficiary designation form would be the next place to look. Are the kids the secondary beneficiaries? So if the friend waived rights, the kids would automatically be next in line? Otherwise you have the problem of the friend stepping out of line and the next person in line getting it instead of the kids.

[PFranckowiak]

The son is the contingent beneficiary - Also the beneficiary prior to the girlfriend being on scene. She just wants the kids to have it. So what does she have to do to refuse (disclaim) the payment?

Thanks for your prompt responses.

PF

[jevd]

The son is the contingent beneficiary - Also the beneficiary prior to the girlfriend being on scene. She just wants the kids to have it. So what does she have to do to refuse (disclaim) the payment?

Thanks for your prompt responses.

PF

She should seek the advice of an attorney for a properly executed disclaimer. If the son is the contingent then he would get 100%. You mentioned multiple children. The other children would not be entitled unless the contingent beneficiary disclaimed all or part. Then you would look to the plan language. It could get complicated. I suggest an attorney familiar with estates etc.