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My son inherited a 401k from his dad, however, his uncle & grandpa cashed it out without telling him about it!

My ex-husband died and his father took over EVERYTHING! He would not let my son take anything (personal, car, cash, etc). My son found $600 in a piggy bank and his grandpa took it out of his suitcase (and counted every penny)... Recently, my son was told that there was a 401K left to him. My son called his grandpa and was told that it was in my son's name, grandpas name and his uncles name. Then his uncle said "we already took care of it"! I'm not familiar with these things, but I'm pretty sure that they are not allowed to do that! When my son received another pay out from his dad, his grandpa and uncle claimed that they couldn't "find" him! We are 1,500 miles away, but they have my sons phone number (same number for 7 years). My son was at his dad's funeral and also his grandma's funeral a few years later. I know that there are different ways to handle the 401k's and if he doesn't put it in an account right away and deal with it properly, there can be penalties. And he's not even sure that he'll see a penny of it! How can we find out what his dad left behind? Who can we talk to? Do we have to get a lawyer? My son could use the money. His grandpa is a cash Hoarder!

Nov 08, 2013 by Shawna from Bellevue, NE in  |  Flag
4 Answers  |  6 Followers
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3 votes

There are actually death and divorce attorneys out there that specialize in this kind of thing... most likely if you try and contact the former employer for beneficiary information they won't give it to you since you are no longer the spouse.

However, if ordered by an attorney for a legal matter the company is then required to divulge that information.

Hope you and your son find what is rightfully his!

Travis

Comment   |  Flag   |  Mar 12, 2014 from Indianapolis, IN

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2 votes
Andy Tilp, CFP® Level 16

Shawna,

First, my condolences for the losses in your family. It is heartbreaking to hear your experience.

Your ex-husband should have designated a beneficiary on the 401k documents. By law, the proceeds from the 401k can only go to the beneficiary.

Because this is such a serious legal matter, you need to contact a trusted estate planning lawyer in your area. They would know how to investigate and help correct any violations. Your attorney would also know if you should contact your local District Attorney, should this also involve criminal behaviour.

If your son is entitled to the 401k proceeds, be aware that there are specific tax rules of how and when he can withdrawal the money. However, if the money is already withdrawn, how the tax rules would be applied would be another question for a tax expert, such as a CPA.

Best of luck to you and your son.

View all 4 Comments   |  Flag   |  Nov 08, 2013 from Sherwood, OR
Andy Tilp, CFP®

Shawna - because there are so many unknowns in this situation, you really do need to have an attorney help you. The attorney can act as your go between so you or your son will not have to deal directly with the others. I suggest you call an attorney today. If you do not know an attorney, ask trusted friends or co-workers if they can recommend one. Or contact your state Bar Association.

Flag |  Nov 08, 2013 near Sherwood, OR
Shawna

Okay, thanks.......... This is exactly what I figured that I would need to do! Too bad some people force things to this point.

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Flag |  Nov 08, 2013 near Bellevue, NE

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Rich Winer Level 20

Shawna, One way or another, you need to obtain a copy of the beneficiary form for your ex-husband's 401K, which show all named beneficiaries. To find this information, you may want to contact your ex-husband's employer or the 401K custodian (if you have the name). Tell them your story and should be able to help you, assuming your son was actually listed as a beneficiary. It's always possible that he may have been listed as a beneficiary at one time but that your ex-husband removed him, for some reason. You should be able to find out by calling the 401K provider.

In regard to any non-retirement assets to which your son may have been entitled, you should try to obtain a copy of his will and living trust (if applicable). If your ex-in laws will not provide them, then you may want to obtain them through legal channels.

On final note of interest, you might be surprised to learn than one of the most common retirement plan-related mistakes is failing to update the beneficiary form. It's possible that your ex-husband failed to remove your name from the beneficiary form after your divorce, and that you may have been entitled to proceeds from his 401K. You should inquire about that as well with the 401K provider. Hope this helps.

1 Comment   |  Flag   |  Nov 12, 2013 from Woodland Hills, CA
Rich Winer

Sorry about all the typos. I think you can still gather the important information from my post. Let me know if you have any further questions.

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Flag |  Nov 12, 2013 near Woodland Hills, CA

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1 vote

Definitely seek legal counsel on this one... all good suggestions above.

Best of Luck,

Rod

Comment   |  Flag   |  Nov 14, 2013 from Springfield, MO

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