403(b) Loan – Options at Death
Client died unexpectedly in 2020 and had an outstanding loan. The client was issued a 1099 and the full loan was counted as a distribution. Is there anyway we can revert back and do a 5-yr payback so that it doesn’t count as a distribution?
Permalink Submitted by brcwm on Thu, 2022-05-05 14:03
?
Permalink Submitted by Alan - IRA critic on Thu, 2022-05-05 15:11
The plan might have provided some options, perhaps in conjunction with the CARES Act, but apparently there were no options available under the plan or the beneficiary did not respond in time. How much time passed after client’s death before the plan was notified and received the death certificate? One thing is clear, unless the plan violated their provisions in dealing with this, they are not going to reopen the processing question. It is also possible that the 1099R offset distribution was issued to the wrong person or entity. Following is a thread addressing a similar situation:
401k Loan Default or Repayment Upon Death | Ed Slott and Company, LLC (irahelp.com)