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What is the name of your state? What is the name of your state? What is the name of your state? NY

I am the non-spousal beneficiary of a 401(k) close to 7 figures. Over a year ago the company of the deceased employee had me sign a form that I now discover was questionable. It changed the 401(k) to my name and social security #. The decedents name is no longer on any statements. There were no distributions made and the money remains with the original plan. At the time they implied that the 401(k) was now mine and there was nothing else to do. They even gave me a booklet telling me about my plan (same one they give to employees).

In the past year I became much better educated on non-spousal 401(k's). I learned that the tax issues are complicated and to get "expert" advice. I hired an expert tax attorney to handle the estate and even hired an accountant. Neither of these people ever read the company's 401(k) plan... and both gave me advice to take the money over my expected lifetime and not in a lump sum. Their advice was based only on the IRS laws for qualified plans and not on what the actual plan said.

After several requests (one written) to get a copy of the plan and no real cooperation from the company, I had my personal attorney write them. He received the plan and is trying to deceifer it (it appears that I must take a lump sum distribution). The tax consequences are tremendous.

I feel like I've been let down by The Company, My Tax Attorney, and My Accountant... where did I go wrong or have I been wronged? Also, what are the chances of getting the company to ammend the Plan?


Senior Member
So, roll that 401(k) to an IRA and take your annual distributions from the IRA. You'll then only pay ordinary income tax on the annual distributions rather than all at once on a lump sum distribution.


It sounds like you know the tax law on point. All I can add is that if you find that any of the advice you got from the attorney, accountant, or the company resuled in a bad tax strategy for you, and you could have saved tax by following proper advice, then you have a law suit for damages based on professional mal practice, in the case of the lawyer or accountant, and in negligence in the case of the company. However, I am not sure that there was anything you could have done that would have saved taxes.

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