Notifying A Beneficiary

[CaneK]

What is the name of your state (only U.S. law)? Connecticut

My finace' passed away two months ago. The copy of her life insurance policy was never found. I do not know the company she was insured with. She once told me that I was one of the beneficiaries on her policy.

I have since found out that I was a beneficiary on a retirement fund she had. The executor of her estate never notified me of this. If I am also a beneficiary on her life insurance policy, is it up to the executor to notify me of this? Or would the insurance company notify me?

A month after her death I moved from the apartment we shared so the insurance company would not have my new address or phone number. Is there any way I can find out which company she was insured with and learn if I was a beneficiary. (I have no contact with the executor.) Thank you. Roger D

 

[Dandy Don]

If she purchased this through a group life insurance policy where she worked, you may want to check with the personnel office at her company to see if they can provide you with the name and address of the company. If she purchased it outside of work, there is a reputable company at MIB that does policy searches through the top 400 insurance companies in the US for a $75.00 fee.

DANDY DON IN OKLAHOMA ([email protected])

 

[CaneK]

Re:

Thanks Dandy Don, I appreciate you taking the time to answer.

I'd also like to ask: As a beneficiary on an IRA am I legally responsible for making monthly payments on a loan she had against her IRA account? She took out a loan against her IRA and the bank told me that I or her family have to make the monthly payments she agreed upon until probate is completed. And that I cannot be paid the balance beyond the loan amount until probate is done. So I have been making monthly payments to the bank on this loan she had against the account.

I have also found out that probate has not been filed yet. It has been three months since her death. Is this unusual? As a beneficiary do I have a legal right to contact the attorney who was hired by her family to deal with her estate (She died intestate) Again, I am concerned because I was never notified by her family, or their attorney, that I am in fact a beneficiary. Thank you.

 

[Dandy Don]

How much was the loan for and how much is the IRA worth? It is the executor's obligation to handle these payments, not yours (although it's great that you were responsible enough to want to take care of it temporarily) IF there are enough assets in the estate to do so.

She probably does not have much of an estate and that is the only reason I can think of that the executor would not have filed probate. The executor may not have known about the retirement fund so maybe that is why he didn't contact you. You can discuss this with the executor if you wish but he/she is probably not going to be too cooperative. You can file to open up probate so that the judge can ask the executor to produce the will for court to see exactly what it says.

DANDY DON IN OKLAHOMA

 

[CaneK]

Re:Loan

The IRA is worth 10k and the loan against it is for 9k. I was told by the bank that legally it is the executors responsibility to make these monthly payments on the loan. I chose to assume the payments as morally I thought that was the proper thing to do. (We lived together for 21 years) But since I learned that probate has not yet been filed, I am becoming concerned as these payments can go on for months.

As for her estate, she had the IRA, a 401k, and a house she bought 6 months before her death. The house was valued at 180k and she bought it with zero down, so I am sure there is no equity there.

She died intestate. What from what I understand, in such a case, the nearest of kin is named by the court as executor. Is it possible that the court has yet to name an executor, hence the delay in filing for probate?

I was notified by the bank that her family knew I was the beneficiary on her IRA a month before I was informed. And I was only informed of this when asked to assume payments on the loan.

I do know that her family has an attorney involved in her estate. As a beneficiary, and one who is making payments on her existing loan, do I have the legal right to contact this attorney? I do not know my rights. (No common law marriage in my state)

Although I have always had a very good relationship with her family, they have not been very forthright with me when I ask questions. I learned that probate was not yet filed by checking with the court.

 

[anteater]

I thought that I posted this, but must have blown it.

You (or someone) has an income tax problem with this IRA. From what you say, there essentially is no IRA any longer.

The IRA is worth 10k and the loan against it is for 9k.

Retirement Plans FAQs regarding Loans

1. Can a loan be taken from an IRA?
Loans are not permitted from IRAs or from IRA-based plans such as SEPs, SARSEPs and SIMPLE IRA plans. Loans are only possible from qualified plans that satisfy the requirements of §401(a), from annuity plans that satisfy the requirements of §403(a) or 403(b), and from governmental plans. (Code §72(p)(4); Reg. § 1.72(p)-1, Q&A-2)


2. What happens if a loan is taken from an IRA?
If the owner of an IRA borrows from the IRA, the IRA is no longer an IRA, and the value of the entire IRA is included in the owner’s income. (Code § 408(e)(2) and (3))

If the owner of an IRA pledges part of the IRA as collateral, the part of the IRA that is pledged is treated as distributed. (Code § 408(e)(4))

 

[CaneK]

Re:IRA Loan

Thanks for the reply, anteater.

It was a traditional IRA that she took the loan out against. The bank told me that the branch that approved the loan 'made a mistake' because (as you pointed out) a loan is not supposed to be taken from an IRA.

The bank told me that as long as the monthly payments are made on the loan she took out, once probate was finished, the balance of the IRA, that exceeds the loan, and the monthly payments I made will be reverted to me as beneficiary in a lump sum check payment (minus the interest on the monthly payments I made)

Does this sound logical? Or do you think I have a problem here?

The paper I signed at the bank, as beneficiary, is titled as 'IRA WITHDRAWAL STATEMENT'

 

[Dandy Don]

Have you checked at her place of employment to see who is named beneficiary of her 401K?

The family is probably not opening up probate because they don't think she has much of an estate, but it is in YOUR best interests to get probate opened up so the IRA matter can be cleared up. Consult with a probate attorney to help you figure out if you should go ahead and get probate started.

Since the family doesn't like you very much, do not contact them or the attorney. Believe me, they will be in touch with you, if necessary, if probate is opened up.