Beneficiary of deceased daughter accts
My daughter passed at 38, leaving 3 children. I’m beneficiary of her life insurance &. 401k. This $ will only be used for the children’s expenses. How would this impact me as I recieve these benefits for the children’s expenses? I need advice & guidance HELP
Terry Says
Oh, I am so sorry for your loss. That is just the reverse of how things are supposed to happen. Here are some ideas, and please feel free to write back to the email you receive saying your question has been answered, if you still have more concerns.
The life insurance proceeds will come to YOU tax-free. Just put the money in the bank in a money market deposit account. Nothing else.
The 40lk will have to be distributed to you over the next 10 years. Talk to the HR department where your daughter worked. They will likely help you roll it into an inherited IRA, and you can take the money out of that account. It will be considered taxable income to YOU as you withdraw.
I’d call Fidelty or Vanguard (800-FIDELITY or 800-VANGUARD) and ask them to help you make this transfer, by directly contacting the employer’s HR department. The goal will be to let the money grow –invested conservatively — over the next 10 years, taking it out slowly, unless you have an immediate need for the money for their care. Again, ordinary income taxes will apply.
