Disclaiming 401(k) by Only Benficiary
A client inherited her sister’s 401(k) this year (October 2015), the client is the only named beneficiary on the 401(k). The sister was 64 years old and the beneficiary is 62. The question is two-fold: First, can the client refuse the inheritance? If so, can she also then designate her sons as the new beneficiaries of the 401(k)?
Permalink Submitted by Alan - IRA critic on Tue, 2015-12-08 17:23
Client can file a qualified disclaimer up to 9 months after the date of death, but the plan provisions need to be understood regarding the default beneficiary for the death benefits. Client cannot re-direct the death benefits to those she wants. If the sons were named as contingent beneficiaries on the plan document, the disclaimer would result in them being the designated beneficiaries. But without them being listed as contingents, the typical plan would make decedent’s estate the default beneficiary. That would result in the decedent’s will determining where the death benefits would go. If no will, then the state intestate provisions.