How to Handle Retirement Assets When Administering an Estate

For many people, retirement accounts are a significant part of their overall estate. When the owner of the account passes away, the person in charge of administering the estate may need to oversee their management and distribution. It is important to handle these assets properly to avoid tax and other issues.

7 Types of Retirement Assets to Look for When Administering an Estate

What types of retirement assets may be a part of the estate you are administering? The following is an overview:

  1. Employer-sponsored retirement plans
  2. Employer-sponsored pensions
  3. IRAs, including traditional, Roth, SIMPLE, and SEP IRAs
  4. Keogh accounts
  5. Profit sharing plans
  6. Self-employed 401(k)s
  7. Social security survivor benefits

There may be additional types of accounts that are part of the estate as well.

Important Information You May Need to Manage Retirement Assets During Estate Administration

Once you identify the asset, you may then need to gather certain other information in order to help you administer the estate. The following are six examples of such information:

  1. The name of the financial institution where the account is held
  2. The account number
  3. Contact information for an account manager or advisor
  4. Copies of plan statements
  5. Your loved one’s date of death and a copy of the death certificate
  6. A copy of the trust instrument if the beneficiary of the asset is a trust

After obtaining the information you need, there are several tasks that must be carried out next.

What Steps to Take During an Estate Administration Involving Retirement Assets

As the person in charge of administering the estate, it is important to handle retirement assets properly. The following are four suggested steps when dealing with retirement accounts:

  1. Contact an experienced estate administration attorney. There are many tax issues surrounding retirement assets that pass as a result of inheritance. It is crucial that you receive guidance from a knowledgeable professional before proceeding in order to avoid unintended consequences.
  2. Review the terms of beneficiary trusts. If the beneficiary of the asset is a trust, review the trust terms to determine whether it contains certain provisions that allow for the asset to continue to be held or whether it must be paid out over a specific period of time.
  3. Put the financial institution on notice of your loved one’s death. The institution will likely want to see appropriate documentation verifying your authority to deal with the asset. For example, if you are a successor trustee of the trust that is the beneficiary of the asset, the financial institution may want to see a copy of your trustee appointment and acceptance.
  4. Consult with a CPA. If your attorney advises it in order to prepare for any tax consequences relating to the distribution of the asset, talk to a certified public accountant.

While administering an estate may seem difficult, you are entitled to seek assistance from a knowledgeable attorney who can help you through the process. We encourage you to contact us today at (888) 443-6590 for more information.

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Scott Grossman

Scott Grossman

Attorney

The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307