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Quick legal question about 401k and estates
Posted by: Ombligo
Date: April 18, 2006 06:01PM
I'll be asking my attorney later but just trying to make some decisions regarding my will. I want to save some time and have my thoughts ready for when he comes to the house to discuss these matters.

If my family dies along with me, do the heirs in my will have to cash in my 401k and Roth IRA's for immediate disbursement? Does it matter if they live in another country?

They will be getting more than they need for starters from the sale of our house. I'd like them to leave the accounts and investments alone for a few years and earn some interest. The amount we are talking about exceeds anything they have or can even fathom. To give them everything at once would just set them up for being scammed.



“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias

The German word for contraceptive is “Schwangerschaftsverhütungsmittel”. By the time you finished saying that, it’s too late
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Re: Quick legal question about 401k and estates
Posted by: rgG
Date: April 18, 2006 06:25PM
As regards a regular IRA, your named beneficiary whether it be your spouse or someone else, can, I believe opt to treat the IRA as their own. This used to apply only to your spouse but I am pretty sure that was changed a few years ago and now any named beneficiary can take over the IRA just like they had started it. I do not know how this applies to a ROTH or a 401K, just a traditional IRA. I am not a lawyer nor do I play one on TV, so take the info for what it is worth. smiling smiley

Edit: talk to your lawyer about leaving the assets in a trust for the benefit of your heirs.





Roswell, GA (Atlanta suburb)



Edited 1 time(s). Last edit at 04/18/2006 06:26PM by rgG.
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Re: Quick legal question about 401k and estates
Posted by: SteveJobs
Date: April 18, 2006 06:25PM
Sounds like you need a trust.



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Re: Quick legal question about 401k and estates
Posted by: tronnei
Date: April 18, 2006 07:48PM
If you're married, your spouse can usually opt to leave your 401(k) account alone until the date you would have reached aged 70-1/2 if you had lived. If you're single, then most plans will require payment to your beneficiary within 5 years.

These rules may differ from plan to plan, so check your plan's summary plan description (SPD) for specific information. If you don't have an SPD, get one from your plan administator (who is required to provide it free of charge).
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Re: Quick legal question about 401k and estates
Posted by: ADent
Date: April 19, 2006 01:23AM
An IRA can be adopted by a spouse like it was thiers.

Non spouse heirs have 5 years to pay out (and pay taxes), or 1 year to start a disbursement plan based on their lifetime.

If there are no beneficiaries alive then it goes to your estate and typically paid out immediately.

Simpler article: [www.fool.com]

Detailed article: [www.montana.edu]
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Re: Quick legal question about 401k and estates
Posted by: Ombligo
Date: April 19, 2006 04:48AM
Thanks ADent.. great sites that put the issue in easy to understand language.



“No persons are more frequently wrong, than those who will not admit they are wrong.” -- François de La Rochefoucauld

"Those who cannot accept the past are condemned to revise it." -- Geo. Mathias

The German word for contraceptive is “Schwangerschaftsverhütungsmittel”. By the time you finished saying that, it’s too late
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