See through estate?

[Bird]

Hi all, it's been over a year or more since I've in. I'm retired but trying to help someone out...

a 403(b) participant passed away and TIAA/CREF is saying that he named his widow for a portion of his account/certificate, but did not name a bene for another portion, and that portion is to go to his spouse 50% and his estate 50%. If in fact there was no bene des that checks out with the SPD (confirming my long-held belief that 403(b)s are a different world).

I'm familiar with the idea of a see-through trust, but is there any such thing as a see-through estate? She is the only beneficiary of his estate so she is ultimately entitled to all of the benefits, and of course would prefer to roll them over rather than open an estate and have the estate treated as the direct beneficiary.

I don't think so but thought I would take a shot. 

[Peter Gulia]

It’s not necessarily Internal Revenue Code § 403(b) that sets up unusual provisions; sometimes, it’s a TIAA, CREF, or other contract that sets up provisions many other insurance, investment, or service providers don’t typically use. Or an interaction between an employer’s plan and one or more TIAA-CREF contracts.

Don’t rely on the summary plan description; there are many reasons an SPD might not accurately describe the plan. Don’t rely on what TIAA’s service people say about beneficiary defaults; there are many ways they might be mistaken (usually, innocently). But circumstances might it make it impractical for you to read the plan and contracts.

If a beneficiary is the participant’s estate, some providers might help an estate’s personal representative arrange to treat that estate’s ultimate taker as if she were the plan’s beneficiary or at least a distributee. To do so, the plan’s administrator, each insurer or custodian, the recordkeeper, the paying agent, and other service providers get releases, satisfactions, and indemnities. To arrange this requires that the personal representative’s advocate have a practical ability to get the attention of the service providers’ lawyer who has enough legal knowledge, time and willingness to listen, and discretionary authority to commit the service providers, and to ask for the plan’s administrator’s approval (or make the service providers’ risk decision to proceed without the administrator’s approval). Also, the indemnitees might want their indemnities from people with enough money and other property to pay at least the indemnitees’ defense expenses.

Do you have an in with TIAA?

Is the difference between a rollover and receiving money from the decedent’s estate enough to support an effort?

This is not advice to anyone.

[Appleby]

Agree with Peter. But I know from experience that TIAA will not "treat that estate’s ultimate taker as if she were the plan’s beneficiary or at least a distributee". 

Also, this sounds like a non-ERISA 403(b), since the spouse is not the default beneficiary. If they are saying the estate is 50% beneficiary, they should be able to explain how and why they cam to that conclusion. Assuming they are right- she might be able to rollover any distribution (made to the estate), to her own IRA ( many PLRs have allowed such rollovers). In this case, it would be her treating herself as the distributee- but she must consult with her CPA or attorney with expertise in such rollovers before completing any such rollover.

No- there is no such thing as a see-through estate. PS; the See-through trust would affect only the calculation and the option for rollover. Generally, rollovers are not permitted for estates, but the IRS have made exceptions in cases like the one you describe. 

[Peter Gulia]

And Denise Appleby has tireless experience in helping people get the most that can be gotten from the recordkeepers, insurers, and custodians.