Get Beneficiary Designation - USW Benefit Funds

Designate a family member or friend. This includes your spouse, domestic partner, child(ren), relatives, or friends. You don't need to be related to someone to name them as a beneficiary. However, if you're married, your spouse is usually entitled to the assets in your 401(k).

If you are married, federal law says your spouse* is automatically the beneficiary of your 401k or other pension plan, period. You should still fill out the beneficiary form with your spouse's name, for the record. If you want to name a beneficiary who is someone other than your spouse, your spouse must sign a waiver.

After you die, any unused funds in your account will pass to those you name as beneficiaries. If you do not name a beneficiary or the account's beneficiary is deceased, the IRA will become part of your estate.

You can treat yourself as the beneficiary and withdraw the funds, accepting any taxes due at the time. If you're over 59½, you won't have to pay early withdrawal penalties. You will owe income tax on the disbursement. You can disclaim the account and pass it to an alternate beneficiary.

Your beneficiary or spouse should receive the money by the end of the year that you die. If your beneficiary is not your spouse, they generally receive the money at the end of the year where you should turn 70.

When a person dies with a 401K plan, their spouse (or other beneficiaries) can inherit the funds in the account and continue using them as they, please. They must ensure they meet all IRS requirements for taking over ownership of an inherited 401K plan.

Inherited 401(k) distribution options They are discussed in detail below. Roll the money over into your own 401(k) or IRA (spouses only). Take a lump-sum distribution. Withdraw all funds by the end of five years after the owner's death (only if the account owner died before 2020).

If you take a lump sum distribution, you may incur hefty taxes, if you realize a significant income or the money may push you into a higher tax bracket. If the inherited 401(k) is pre-tax, you'll pay taxes at ordinary income rates. If the account is a Roth 401(k), then you won't owe any income taxes on the withdrawal.