intestacy

Submitted by Gregory Kozerski on Tue, 2015-09-15 20:16

Hello,

Thank you for your feed back on the following. A husband dies without a will (intestacy) and had a pension plan which he named his estate as the beneficiary. The husband died before his RBD date. He leaves behind a spouse and three children and its determined that each is due a portion of the pension plan assets. If the children receive their share of the pension plan prior to September 30th of the year following his death can the spouse rollover her share to her own IRA?

Again, thank you for your thoughts on this.



Submitted by Alan - IRA critic on Tue, 2015-09-15 20:31

  • What type of pension plan? A surviving spouse is the default beneficiary of a qualified plan unless that spouse has signed a waiver or in some plans unless the decedent had not been married over one year. Did the determination take this into consideration?
  • If the plan was not qualified or subject to ERISA, the surviving spouse can usually do a rollover as the IRS has approved this in several PLRs.

Submitted by Gregory Kozerski on Wed, 2015-09-16 13:23

Unfortunately the Trust document for the plan can’t be located. But from other forms related to the plan it appears to have been a Defined Contribution Pension Plan. Therefore it does appear to have been an ERISA plan. There are forms verifying the need to file Form 5500’s. Form further digging we were also able to verify that in fact the named beneficiary was “The Trustee of the XXX Pension Plan”. Presuming the decedent was the Trustee of his own plan it seems he named himself as the beneficiary?

Submitted by Alan - IRA critic on Wed, 2015-09-16 21:26

The surviving spouse should hire an attorney to pursue the investigation of her interest as the legal beneficiary of the pension plan. She would then be the sole beneficiary and could roll over the entire balance to an owned IRA or perhaps inherited IRA if she is under 59.5. This would certainly be better than the 5 year rule unless the balance is very small.

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