QUESTION
What will happen if 401k beneficiaries are minors?
Asked on May 28th, 2013 on Estate Planning - Utah
More details to this question:
My cousin died recently without a will. His entire estate is comprised of personal property valued at less than $50,000 and a 401k valued at about $8,500. He named his three nieces as the beneficiaries of the 401k. One just turned 18 and the other two are minors. I would imagine the 18 year old will receive the money outright. However, will the distribution to the minors be given to their parents or held in some form of trust until they turn 18?
10 ANSWERS
The money will most likely be held in trust for each of the girls until they reach the age of majority in that state. The parents or someone else can be named trustee.
Answered on May 28th, 2013 at 11:57 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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The parents will need to petition the probate court to be appointed as guardian ad items as to the two minor children for instructions to receive the monies from the 401k plan, on their behalf, with monies to be deposited in a blocked savings account.
Answered on May 28th, 2013 at 11:56 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Depending on the amounts involved, it may pass to the minors, (if less than $5,000), or be paid over to their parents. If more than $5,000, then the probate court would establish conservator ships for the minors.
Answered on May 28th, 2013 at 11:56 PM
The funds can be placed in? a blocked account until the minors reach age 18.? You should consult an estate planning attorney for assistance on how this can be accomplished.
Answered on May 28th, 2013 at 11:14 PM
3 Awards
It depends upon the terms of the 401(k). It may require a guardianship of the minors estate or may be held until 18. Without reviewing the plan, there is no simple answer.
Answered on May 28th, 2013 at 3:42 PM
Probate Attorney serving New Orleans, LA
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James G. Maguire
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The proceeds would go into a minor's bank account. The account would be in the name of the parent, but would be the child's money, to be received when the child turns 18.
Answered on May 28th, 2013 at 3:32 PM
Without action, the money might end up in a Court managed Conservatorship. Have the attorney for the estate work with the the 401(k) trustee and determine if a transfer to to a minor's account managed by their parents is possible.
Answered on May 28th, 2013 at 3:30 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Your premise that the funds will be held in trust for the other minors is correct.
Answered on May 28th, 2013 at 11:42 AM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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Probably some kind of trust account with the parents as trustees.
Answered on May 28th, 2013 at 11:42 AM
Personal Injury Attorney serving Midvale, UT
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Arrow Legal Solutions Group, P.C.
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The 18-year-old will get his or her money. The other money will be given to the parents or custodians of the minor children or if a trust will set up it'll be distributed through the trust.
Answered on May 28th, 2013 at 11:42 AM