Do you and your loved one have a will? Do you know what happens to a retirement account if you don’t? Having a retirement account is critical to supporting yourself when it’s time to withdraw from the working world. It tends to be one of the largest assets by the time of retirement. However, should the unthinkable happen, and you or your loved one dies with a large sum left in the account, it’s good to know what happens to that money, especially if you don’t have a will. Here’s what you need to know.
With a Beneficiary
If someone has an IRA or a 401(k), they most likely named a beneficiary for those accounts. Should the account holder die before the beneficiary does, with money left in those retirement accounts, that money will go to the named recipient.
Without a Beneficiary
If you or a family member dies after the named beneficiary or dies without one named, the funds in those retirement accounts transfer to the deceased’s estate. Once the probate process is complete, distribution of funds to the heirs named in the will can take place.
Without a Will
When someone dies without a will, it’s called intestate. If this happens, the courts step in to manage the estate of the deceased in a process called probate. A judge will assign a representative to manage the estate during probate, including the assets, accounts, and belongings left behind. With direction from the court, that representative is responsible for the distribution of those assets and accounts to the living heirs.
If your loved one passes away without a will, you don’t have to go through the overwhelming probate process alone. It’s vital to have an attorney represent you and your interests during what can be a very emotional and stressful time. Reach out to the team at McCutchen McLean, LLC for the professional legal support you need.