Combining account balances upon death

[rblum50]

          A 401(k) plan has about 10 participants in it. There is the owner, the owner's wife (who is terminated) are both 100% vested. Both the owner and wife also have individual IRA's. Here's the question: the owner died several months ago. Is there anyway that his 401(k) account balance, either directly or indirectly, can be rolled into his wife's 401(k) account?

[Luke Bailey]

rblum50, couldn't this be done as a distribution to the surviving spouse (with all applicable paperwork for that) and a direct rollover by her to her account (with all applicable paperwork for that)?

[Mike Preston]

It remains to be seen who the beneficiary is.

[rblum50]

The wife is the beneficiary. Mr. Bailey's comment seems reasonable. Thank you both.

[Kevin C]

Does the plan document allow terminated participants to roll into the plan?  Our current VS document has an option to allow terminated employees to roll in.  We don't use that provision, but it is an option. Prior versions of our documents only allowed employees to roll amounts in.  Now, if she rehires ...

[Luke Bailey]

rblum50, Kevin C's comment is well taken. Make sure plan document permits the rollover, and if not amend plan to do so. I think most plans allow participants who still have accounts, but who are no longer active, to roll in, but there are probably many that don't as well.

[Belgarath]

FWIW, virtually none of our plans allow rollovers into the plan by terminated employees. Our employers generally want nothing to do with potential problems/questions/issues with, for example, ineligible rollover money coming into the plan, etc., etc...

On a personal level, if I were an employer, I certainly wouldn't allow it.