Loan of Deceased Participant - Can it be repaid by estate prior to the Beneficiary taking a distribution?

Can it be repaid by the estate or family prior to the Beneficiary taking a distribution?

Sure.  That would also give the beneficiary more sheltered funds rather than a loan default/taxable event to the participant's estate.  (Of course the default date may have accelerated upon termination of employment, too.)

The plan doesn't care who repays the loan.  Indeed, a prudent fiduciary would be hard pressed to *not* accept money in repayment of a loan regardless of the source.

Theoretically, I'd be cautious about whether an estate can or should be the one to repay that debt.  That's a matter of probate law in the jurisdiction in which the estate is in existence....  The issue in my mind is whether those who would suffer the tax consequences of the loan default are *exactly* the same as those who would benefit from the estate if the loan is not repaid.

9 hours ago, MoJo said:

Theoretically, I'd be cautious about whether an estate can or should be the one to repay that debt.  That's a matter of probate law in the jurisdiction in which the estate is in existence....  The issue in my mind is whether those who would suffer the tax consequences of the loan default are *exactly* the same as those who would benefit from the estate if the loan is not repaid.

Mojo, good point, but I think that would be a problem for the estate and its beneficiaries to work out, not a problem for the plan.

11 hours ago, Luke Bailey said:

Mojo, good point, but I think that would be a problem for the estate and its beneficiaries to work out, not a problem for the plan.

Oh, absolutely.  The plan shouldn't get in the middle of it.  But if someone (anyone) proffers payment on the loan, the plan should take it.