Beneficiary Scenario Question

[Guest mmaggs]

A daughter of a deceased employee called. She wants to claim her deceased mother's pension. She lives on the West Coast and we are located in Massachusetts. She is not the listed beneficiary. There is no beneficiary listed on this account.

The spouse is deceased. Our plan document states that we can pay to the spouse and in the case that the spouse is deceased then pay to the Estate. Their is no estate set up. It was closed about 6 years ago and she would have to hire an attorney for a percentage to set it up again to collect these funds under the estate. Is there less then 11K in the account.

Is there any way we can pay this to her directly?

Thanks.

[david rigby]

If the plan provision(s) define the default beneficiary as "estate", the plan cannot pay to someone else.

"Thou shalt follow the terms of thy plan." (That's why the plan is in writing.)

First, the cost of creating/re-opening the estate is not the concern of the plan and/or plan sponsor. Get the proper documentation, because that's what the plan requires.

Second, re-read the plan to confirm thay you have the correct interpretation of "beneficiary".

Third, if desired, the plan, including the definition of beneficiary, can be amended (assuming it's done on a non-discriminatory basis.)

[MoJo]

If the plan provision(s) define the default beneficiary as "estate", the plan cannot pay to someone else.

"Thou shalt follow the terms of thy plan." (That's why the plan is in writing.)

I agree with David - plus I would add that the State has an interest in having the estate re-opened to include "recently discovered" assets - there may be estate tax consequences, and there most certainly are income tax consequences.

[masteff]

Some states have a procedure for an affidavit of small estate. I recently helped my step-mother do one on a life insurance policy on my father. It would be the simplest and cleanest option at this point but you'd want to check w/ counsel, especially since your situation involves 2 different states.