403B beneficiary question

Submitted by Kevin O'Hearn on Mon, 2019-10-14 16:41

Hello, A brother had a 403B account and passed away on 05/01/2019 and his sister was listed as beneficiary. Sister never inherited the 403B plan and passed away on 08/01/209. Would the 403B plan now got to the estate for the sister since she never took any action to inherit the plan?

Any feedback would be greatly appreciated. Thank you.



Submitted by Alan - IRA critic on Tue, 2019-10-15 00:33

  • She did inherit the plan, but never submitted the paperwork required to have the 403b retitled with her as beneficiary. Her estate will now inherit the 403b and the executor will have to submit the death certificate for both the participant and the sister, as well as her estate TIN, address of the estate and name of executor.  That said, the applicable distribution period for RMDs is still based on the age of the deceased sister unless brother was younger than sister, in which case RMDs would be based on the remaining life expectancy of brother.
  • Since the designated beneficiary for the 403b is deceased, a direct rollover of the plan to her estate is not allowed. While the 403b might be willing to make annual RMD distributions to the estate, it is more likely that the plan provisions will require a lump sum distribution to her estate.

Submitted by David Mertz on Tue, 2019-10-15 11:48

Depending on the details and state law, it might be possible for the executor of sister’s estate to disclaim on behalf of sister to allow the 403(b) to be inherited by brother’s contingent beneficiary (or other primary beneficiary, if any).

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