Check for Deceased Spouse
Hello,
I have a interesting situation that I would like to get your thoughts on:
Wife takes a 401k distribution, made payable to her directly. While check is in the mail, she dies. Husband is the bene. What are the husband’s options? Can he roll to his own IRA as he is the bene? Even if he can, how would it get deposited if check is made payable to the wife? Best option I would think is ask the 401k provider to place a stop payment on the check if they are willing.
Any feedback would be greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-26 18:30
The easiest and most technically correct approach is to have the executor deposit the check into the estate account. The decedent will receive a 1099R for the distribution. and if applicable the distribution will be applied to the year of death RMD.
Anything else will be a hassle, particularly if the beneficiary of the estate is not the husband. RMD status is a factor. If husband as both beneficiary and executor requests the plan to stop payment or to accept return of the check, and block the issue of a 1099R, good chance the plan will refuse, but may be worth a call.
The amount of the check would be a factor in deciding how much effort to expend if the first paragraph simple solution would present a major downside.