Can you receive a family members' 403(b) contributions without a beneficiary?
My mother passed away in 2012. Her contributor contacted me to tell me that she left a 403(b) retirement plan without any beneficiaries. Is there any way for me to receive her contributions and avoid probate?
Sorry to hear about your loss.
Unfortanetly without being named as a beneficiary the funds will need to settled via the probate process as it will be considered part of your mother's estate. If there is an executor named I would reach out to them to see what the process will be going forward.
I hope this helps
Probably not. Under normal circumstances most 403-B plans and 401(K) plans have a provision that indicates that if no one is named as a beneficiary of the qualified plan, the payment would be made to the estate. If in fact this is correct, something will have to be probated to get the money out of the estate. I'm assuming you're aware of whether your mother had a will and if she did, the next question is who is the executor. Assuming for the moment its you, don't necessarily fear probate but go to the court to find out exactly what the requirements are and if this is the only probate asset, it should pose no problem of any consequence. Since is been at least five years since her death, you may want to check with someone who understands qualified plan distributions to determine if you can rollover an "Inherited IRA". Unlike a traditional IRA, inherited IRAs require a mandatory distribution beginning the year after death and if these distributions were not taken, you going to need some tax advice to determine how to go about playing catch up. You might have a reasonable excuse of not knowing that the plan even existed and that may be enough to avoid any penalties, although I can offer no guarantees as some research on your part is going to be necessary. I sincerely hope this helps and good luck.
No: If there retirement plan has no beneficiaries it passes through your mother's estate. If she had a Will then the beneficiaries under that Will receive the funds through the Probate process. If she did not, her "next of kin" (I.e. her closest living relatives) receive the funds through Estate Administration.
As a side note, the beneficiaries must withdraw all assets by December 31 of the fifth anniversary year following her death or face substantial penalties. In other words, by the end of today.
Wow sorry to hear about your mother and sorry to hear someone let her open a 403b without filling in the beneficiary information. Sadly you will likely need to go through probate and all the hassle and expense that goes with it.
Thanks for your question. So sorry to hear about your mom's passing.
I think I understand the question but I am confused that the custodian knew who you were to contact you but you were not named as beneficiary. However, custodians can only distribute account proceeds of her qualified plan (i.e. 403b, IA, 401k, etc) to named beneficiary. If there is no beneficiary named, the custodian will distribute the account to the Estate whose representative will distribute it via instructions in her will of trust. It will be fully taxabale to the estate upon distribution. This will have to go through probate at some point possibly when it hits the Estate but the personal represenative of the Estate may contact the custodian and provide them with the necessary information for them to distribute the funds.
Hope this helps.
Richard E. Reyes, CFP, The Financial Quarterback(TM)
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