401K Disbursement
Hello. My father passed away in March of this year and I found out a few weeks following his death that he had a 401K plan that had just been sitting for about 15 years and there was no beneficiary designated. He did not have a will and never designated anyone to be in charge of his finances. When we reached out to the former employer, we were told we could not request his 401K because he had passed away and he didn’t request a withdrawal prior to his death. We were told this money goes back to the company. I refuse to believe this. What are our options?
Permalink Submitted by Alan - IRA critic on Thu, 2014-10-09 18:52
The money does NOT go back to the company, and whoever indicated such should be avoided from this point on. The plan was also responsible for distributing RMDs once he reached 70.5, if he had passed that age. If he is married, his spouse would automatically receive the funds, but if single the plan document should state where the money goes. In most plans it would go to his estate, and his executor would have to complete paperwork, and provide a copy of the death certificate and court letters approving them as executor of his estate. Note that IF his estate is the beneficiary, the plan would probably require a lump sum distribution be made to the estate. Since he has no will, state intestate provisions will determine where the funds go, and if no spouse it would go to his children. Perhaps due to no contact for 15 years the plan balance has already been turned over to a govt agency. If you do not get cooperation, I would contact the Dept of Labor, however you need to establish that you are the executor if that is the case because the plan cannot legally deal with other parties.