[WSBAPT] Retirement Account with No listed Beneficiary

[Amy Felt]

Listmates, I have a situation I have not dealt with before. The deceased
died in December 2020. His surviving spouse did not contact me until a few
months ago when an insurance check for house repairs, made out to her and
the estate of xxxx arrived and she could not deposit it into her account.
She then mentioned a brokerage account she also couldn't access. We
recently opened probate.

I just got off the phone with her financial advisor. The deceased had three
403(b) retirement accounts that he opened at the same time all listing his
spouse as the beneficiary except this one account which did not list a
beneficiary. It seems odd that only one of the three accounts opened on the
same day several years ago would lack a named beneficiary, while the other
two list his spouse. I believe he thought all accounts named his wife as
beneficiary and that the missing designation was an error by the custodian.

Fast forward to now, TIAA-CREF is telling the wife that the $150k account
must be liquidated and distributed to the estate through probate. Then,
since the funds will be released to the estate, not the surviving spouse,
she has 5 years to withdraw the funds and pay applicable taxes. The
financial advisor estimated a tax implication of $40-50k. The 403-b was
earned during the marriage and she is the beneficiary since all assets are
community property.

Has anyone had this issue before and if so, how did you handle it?
Ultimately, the custodian is willing to release the funds via the probate
process, but this is not the most tax-advantageous way.

-- 
Felt Law
Amy Felt - Attorney
9840 Willows Road NE Suite #200
Redmond, WA 98052
425-780-6103
(within law offices of Wong Fleming Attorneys)

Felt Law Spokane Location
(next to Music City & within Fannin Litigation Group)
1312 N. Monroe St., Ste.132
Spokane, WA 99201



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