Oklahoma City, OK asked in Estate Planning and Probate for Texas

Q: My Aunt made me the beneficiary on her 401k. She is still married. Will her spouse get her 401k ?

Her spouse left her 30+ years ago, but have not divorced. My Aunt is now deceased.

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1 Lawyer Answer
Ronald Lee Baranski Jr
Ronald Lee Baranski Jr
  • Estate Planning Lawyer
  • Allen, TX
  • Licensed in Texas

A: First I'm very sorry for your loss and offer my condolences.

Generally, a designated beneficiary on a 401(k) passes outside probate much like life insurance or any other account with a designated beneficiary. It is handled based on a written contract and does not come into probate. You should likely reach out to the administrator of her 401(k) and ask them to send you the necessary documents to submit a claim. I am not providing tax advice but would recommend you consult with a CPA as to the best means to transfer this without incurring additional taxes. In most cases, you would have a direct transfer from her administrator to a self-directed IRA owned by you. By transferring this way you would not incur taxes at the time of transfer. This all depends on various other facts not stated including her age and whether she was taking required minimum distributions along with the total amount held in her 401(k) because if substantial the taxes would be that much higher. Once you know the total amount held you should consult with an accountant as to the best option.

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