POA no longer in force

[DMcGovern]

Participant was incapacitated and had a POA. The POA signed the distribution request form for a lump sum. Distribution transaction took place, but unfortunately by the time the check was received the participant had passed away.

Since the POA's rights end when the person is deceased they are wondering if anything can be done with the check, or should it be cancelled and wait until the death certificate is issued? Not sure if it matters, but the POA is also named as the personal representative and 100% beneficiary in the will.

[ETA Consulting LLC]

Participant was incapacitated and had a POA. The POA signed the distribution request form for a lump sum. Distribution transaction took place, but unfortunately by the time the check was received the participant had passed away.

Since the POA's rights end when the person is deceased they are wondering if anything can be done with the check, or should it be cancelled and wait until the death certificate is issued? Not sure if it matters, but the POA is also named as the personal representative and 100% beneficiary in the will.

Well, the POA needed to be valid only at the time the distribution was requested. Assuming the check was issued before the participant died, then it would appear to become part of the decedent's estate, similar to any other asset (i.e. checking account or lawn mower). Even if the 1099 R is issued in the name of the participant in January, the process is complete an the taxable income to the participant is on an asset that may or may not have reached his checking account. If anything, I'd attempt to re-write the check to the participant's estate (for that check only) with any other balance in the plan being inherited to his beneficiary under the plan.

Good Luck!