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  1. #1
    alienwatcher is offline Junior Member
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    What exactly is a beneficiary & what are their rights?

    My brother passed away a few years ago. He did not have a will. He had a retirement account with about $200,000 in it. My mom became the executor of his estate & the money went to her, or so I understood. A year later, my mom passed away, & then my sister-in-law showed me this paper with her name as the beneficiary to my brothers money. I, being dumb, believed her. She sent the paperwork in, but the company denied her request for the money. She then asked me to sign & notarize a paper stating that I said it was OK for her to have the money. I still thought she was the legal beneficiary. So I did. She apparently tried again & was denied the money, & she tried to get me to sign more papers, to which I refused. Is is true that if a person is the beneficiary to a will, no one has to sign any papers saying it is OK for them to receive the money? I think that is true based on the fact that my cousin was the beneficiary to my mom's life insurance money & I didn't have to sign any papers saying she could have that money. As far as I know, she got the money. She never contacted me asking me to sign papers saying it was OK for her to have the money. Any help with this would be appreciated.
  2. #2
    anteater is offline Senior Member
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    My brother passed away a few years ago. He did not have a will. He had a retirement account with about $200,000 in it. My mom became the executor of his estate & the money went to her, or so I understood. A year later, my mom passed away, & then my sister-in-law showed me this paper with her name as the beneficiary to my brothers money... She sent the paperwork in, but the company denied her request for the money.
    Trying to comment on the exact situation is difficult since the facts are pretty fuzzy. Apparently, your mother did not get the money. Your sister-in-law? You mean your deceased brother's surviving spouse? And she asked you to sign something? It would take more concrete facts to make more of a response.

    But here is the general deal. Various kinds of assets - life insurance policies, IRA's, employer retirement accounts, bank accounts, brokerage accounts, annuities, etc - can have designated beneficiaries. When the asset owner passes away, the designated beneficiary(ies) receive the asset value. There is no need for anybody else to "sign off." Usually, a certified death certificate and identification is all that is needed for the beneficiary(ies) to have the asset(s) transferred to them.
  3. #3
    alienwatcher is offline Junior Member
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    Thanks for answering. Let me make it clearer. My older brother died without a will. He was not married nor did he have children. He had a 401K. My mom became the appointed executor of his estate, so the 401k was to go to my mom.
    She passed away about a year later. My younger brothers wife, (my sister-in-law) was taking care of my mom before she passed away. She was 85. Somehow, I think my sister-in-law got a hold of the 401k papers & signed her name as the beneficiary. It was her who sent the papers to the company to try & get the money, but they denied her request. That is when she had a lawyer draw up some papers saying that I & my brother, (her Husband) said it was OK for her to have the money since the paper showed her as the beneficiary. It was notarized.
    Again, they denied her the money. She asked me again to sign papers, & this is when I refused, stating to her that if she was the rightful beneficiary, I didn't have to sign any papers on her behalf.
    Now, since I did not sign the papers, the whole thing (probate) is in limbo, unless I get a lawyer & fight it. I guess it will have to go to court. I don't see how she can prove beyond a shadow of a doubt that she is the beneficiary.
    Otherwise, the money would be split between me & my brother. My sister-in-law should not have anything to do with it. It is only her word saying my mom made her the beneficiary.
    I suppose I'm going to have to get a lawyer.
  4. #4
    anteater is offline Senior Member
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    Usually a 401(k) participant names a beneficiary(ies) and contingent beneficiaries. But, if the participant does not (or if the beneficiaries have predeceased the participant), then the participant's probate estate would receive the proceeds.

    My mom became the appointed executor of his estate, so the 401k was to go to my mom.
    Let's make some distinctions here. The 401(k) would not ultimately go to your Mother because she was appointed executor of your brother's probate estate. The 401(k) would be payable to your brother's probate estate. Now, since your brother did not have a surviving spouse or children and had no will, your Mother probably was entitled to receive the entirety of his probate estate (or 1/2 if his father were alive when he died). Under the intestate succession statutes of most states, where there is no surviving spouse or lineal descendants, parents would inherit before siblings. But, since you don't mention the state in which your brother was domiciled, that can't be stated with certainty.

    When you say that your Mother was appointed as executor, that implies that an intestate probate case was opened and she was appointed by the court to administer the intestate probate estate. And, it appears that the 401(k) custodian still holds the funds. What happened with the probate case? Was it just left hanging? You need to check with the court to find out the status.

    My guess is that you or your brother will need to petition the probate court for appointment as the successor executor/administrator of your brother's estate. When that happens, the 401(k) custodian should be able to release the funds to the successor. Assuming that your Mother was entitled to the entirety of the estate, the successor would then distribute the net assets of your brother's probate estate to your Mother's probate estate. (Yes, that means that probate may have to be opened for your Mother's estate.)
  5. #5
    curb1 is offline Senior Member
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    You said, "I suppose I'm going to have to get a lawyer".

    Yes, and as soon as possible. There is no way you will be able to guide your way through this on your own. From the tone of this, I am guessing that probate was never started with brother. Did brother have any other assets?

    Why didn't your mother get the $200,000 right after your brother passed? Did she contact the institution connected with the 401(k)? What was their response?
  6. #6
    cbg
    cbg is offline Senior Member
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    On a 401k, BY LAW the spouse MUST be the beneficiary unless the spouse has given written permission for it to be someone else.
    Two things I am tired of typing: 1.) A wrongful termination does not mean that you were fired for something you didn't do; it means that you were fired for a reason prohibited by law. 2.) The above answer, whatever it is, assumes that no legally binding contract or CBA expressly says otherwise. If it does, the terms of the contract apply.
  7. #7
    curb1 is offline Senior Member
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    cbg,

    Your comment does not apply in this case. There was no spouse.
  8. #8
    anteater is offline Senior Member
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    Quote Originally Posted by cbg View Post
    On a 401k, BY LAW the spouse MUST be the beneficiary unless the spouse has given written permission for it to be someone else.
    At first, I also thought that the OP might be referring to the deceased brother's surviving spouse. Which would make all the stuff about OP's Mother and the deceased's estate very odd. But OP states that the referenced sister-in-law is a surviving sibling's spouse.

    So, if the OP is even halfway clear on what has been happening, I have to give the sister-in-law kudos for incredible chutzpah.
  9. #9
    cbg
    cbg is offline Senior Member
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    Ah, I misread it the same way and thought we were talking about the deceased's spouse.

    Never mind, then.
    Two things I am tired of typing: 1.) A wrongful termination does not mean that you were fired for something you didn't do; it means that you were fired for a reason prohibited by law. 2.) The above answer, whatever it is, assumes that no legally binding contract or CBA expressly says otherwise. If it does, the terms of the contract apply.
  10. #10
    alienwatcher is offline Junior Member
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    Thanks guys for all the answers. The state is Texas. Here is the deal. My sister-in-law got the papers, but it does not have a notary signature or seal nor the seal that the company needs on it. The 401K company. I guess my next step is to find a good lawyer. My sister-in-law hired her own lawyer to put a stop to the proceedings of the probate, so yes, everything is in limbo. It was all hanging on whether I signed these papers, which I did not. Even her lawyer said I needed to sign the papers, & I told him I was not going to sign them unless he produced proof that she was the beneficiary. So far, he hasn't produced anything. That was 4 months ago.
  11. #11
    curb1 is offline Senior Member
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    1) The institution connected with the 401(k) knows exactly who the beneficiary was at the time of death. There is/should be no uncertainty. It doesn't matter what your sister-in-law says unless it coincides with what is registered with the custodian of the 401(k). Your sister-in-law is bluffing.

    2) Contact the institution and ask exactly what you need to do to get this straight. Ask the specific question, "Was there a designated beneficiary for the 401(k)?'

    3) What does the husband (the other brother) of sister-in-law say about all of this?

    4) You said, "My mom became the appointed executor of his estate, so the 401k was to go to my mom". Why didn't it go to your mom? It didn't have anything to do with brother's estate unless there was no designated beneficiary.

    5) Why wasn't this fixed "a few years ago" when brother died? What has everyone been doing all this time?

    Are you suggesting that there was no designated beneficiary listed with the custodian?
    Last edited by curb1; 05-03-2012 at 03:27 PM.
  12. #12
    anteater is offline Senior Member
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    Quote Originally Posted by curb1 View Post
    1)
    5) Why wasn't this fixed "a few years ago" when brother died? What has everyone been doing all this time?
    There certainly are some things that cause head scratching here. Including how the sister-in-law "ended probate", figured that she could glom on to the 401(k), and got an attorney to help out in all that.

    Anyway, Texas does have a bit of a quirk in its intestate succession scheme when there is no surviving spouse and no lineal descendants:

    Sec. 38. PERSONS WHO TAKE UPON INTESTACY. (a) Intestate Leaving No Husband or Wife.
    ....

    1. To his children and their descendants.

    2. If there be no children nor their descendants, then to his father and mother, in equal portions. But if only the father or mother survive the intestate, then his estate shall be divided into two equal portions, one of which shall pass to such survivor, and the other half shall pass to the brothers and sisters of the deceased, and to their descendants; but if there be none such, then the whole estate shall be inherited by the surviving father or mother....
  13. #13
    curb1 is offline Senior Member
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    That seems pretty clear.

    1) If there were a beneficiary listed on the 401(k) then the listed beneficiary would receive the $200,000.

    2) If there weren't a beneficiary listed, half would go to the surviving mother ($100,000) and half would go to the surviving siblings ($50,000 each).

    3) Then the process starts for "mother's" estate. How does that stand at this time?

    GET AN ATTORNEY YESTERDAY !!!
  14. #14
    selhars is offline Junior Member
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    -- I too, am curious as to why they mother didn't get the 401k money after the son (the OP's brother died).

    Did the mother ever truly settle up and probate the dead son's estate?
    If so shouldn't she have had the money, and the 401k company would be out of it by now (unless you can just let the money stay in that account with that company with mom's name on in instead of the son's.)

    It seems like this whole mess goes back Mom (or the family helping mom) NOT clearing up the dead son's issues, which have now rippled into the deceased mother's estate, as well.

    As another person asked, where's the OP's LIVING brother (the SIL's husband) in all of this? It's his wife that's trying get the money.

    The person who has the right to clear up MOM's estate is the one who should be the main person taking care of all this.
  15. #15
    alienwatcher is offline Junior Member
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    Thanks again for all the answers. Again, I will try & make this a little clearer. My sister-in-law, the one who claims she is the beneficiary, well her husband, (my younger brother) really has not had much to say about any of this. Unless he has been working with his wife in secret trying to get this money.
    I am not sure why all this was not finalized before my mom died, it could be because she got sick and couldn't continue.
    I will go to the firm that has the 401K, which is in Houston, & ask about all this & see if I can find out if there ever was a beneficiary. If you knew my sister-in-law, after meeting her for 5 minutes, you would understand why she would try & claim she was the one entitled to this money.

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