We are often asked “What happens to the funds in my 401K when I die?” Whether you have a trust, a will, or nothing at all in place, the answer is the same. The funds will go to your designated beneficiary without the need for probate.
This means the choice is entirely up to you; however, Federal law mandates that the primary beneficiary of your 401K (or another pension plan) is automatically your spouse. If you are married and your primary beneficiary is someone other than your spouse, your spouse must sign a waiver or consent form for you to designate another person.
Other accounts and assets that do not require a probate or special handling upon death:
Real Property held in a joint tenancy
IRA’s and other retirement accounts
Any security or bank account that has a “pay on death” designation
Life Insurance Proceeds
Now is a great time to check the designated beneficiaries on your retirement accounts and make sure you have a “pay on death” designation on your security and bank accounts. Any one of the attorneys here at J Johnson Law Office, Inc., in Grover Beach or Huntington Beach, will be happy to discuss these issues with you during your estate planning consultation.