Can someone refuse primary beneficiary benefits and still accept benefits from an associated trust?

December 16, 2002

From:  Anonymous
Date:  Tue, 19 Nov 2002

My financial advisor just called me with an estate planning question. I am an estate planning paralegal, but I wanted to be sure about my answer.

His father died. He does not have a taxable estate. He left his 401(k) to his wife, my friend's mother. She is primary beneficiary and the trust is the secondary beneficiary. If she disclaims the funds and they go into the trust, can she received benefits from it?

Answer

Date:  02 Dec 2002

Hello,

Yes. However, there are a number of side issues involved in your question. I recommend that your friend consult with a tax advisor familiar with the issues for retirement plan distributions after a death.

Good luck!
Mike Gray

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