Funds received fter death of both participant and beneficiary

[R. Butler]

Participant terminates employment in 2008.  Receives a distribution, including surrendering a life insurance policy that he had in he plan.

Participant dies in 2013.  His named beneficiary dies in 2014.

The plan received a dividend check a few weeks ago on this policy.  Essentially the insurance company overbilled on the premiums and is refunding about $1,000. 

Who gets the money?  Had the money been in the plan at the time of the participant's death then it would have passed to the beneficiary, but it wasn't.  It wasn't in the plan until after both the participant and the beneficiary died.  Does it now go to the participant's contingent beneficiary or still pass to the original beneficiary's estate?

Thanks in advance for any guidance.   

 

 

[david rigby]

Does the plan definition of beneficiary answer the question?   (Read it twice.)

 

 

[ESOP Guy]

Yup every plan document I have ever seen has the answer to this question. 

It tells you who is the beneficiary.  It tells you what happens if the named beneficiary dies before payment is made. 

[My 2 cents]

Is it possible that the proceeds, which are with respect to overpayments made by or on behalf of the participant while the participant was alive, would be payable to the participant's estate, and not to the beneficiary at all?

[Belgarath]

What kind of a plan? If a defined benefit plan, perhaps the beneficiary isn't entitled to anything, if a full lump sum distribution was made upon termination of employment.

[CMarkB]

I may be missing something, but the question appeared to posit that the entire benefit was paid to the participant in 2008.  If that is the case, it seems to me that the participant's beneficiary is irrelevant and the $1000 dividend would be properly payable to the participant's estate.  Interesting question and it is interesting it took the insurance company 5 years to determine an additional amount was payable. 

[jpod]

If there is no contingent beneficiary, and the plan does not provide a default rule specifying who gets the money after the designated beneficiary dies, in my opinion it should go to the estate of the designated beneficiary.  However, I agree with the comment above that the plan quite likely says what happens in this situation.