Beneficiary fees
Leanna Carman
Saturday, April 12, 2008
I AM WRITING this letter to inform your readers of an issue I recently became aware of due to the death of my husband.
My husband passed away in January of this year from lung cancer. He had established a 401K at his place of employment. It was not a large amount since he had not been employed there too long, but he meant to try to provide for his family. Due to the fact that he had been married before, he had five children living in various states who he also wanted to provide something for.
Consequently, he left myself, his five children and my two children as the beneficiaries. It is law in Kansas that unless there is a waiver signed, your 401K, upon your death, passes directly to your spouse. I willingly signed the waiver thinking that it would be taken care of the way he wanted it to be. When I began the process of filing to settle the 401K, I was told that due to the fact that there were so many beneficiaries, there would be a $50 settlement fee per account, and taxes would be withheld. I understood the tax part, but even the investment counselor who handled the set-up of the 401K, his employer and myself were not aware of the fee per account. So if you have a 401K and you have more than one beneficiary, I urge you to check with your investment counselor to read the fine print. It is lawful, according to the Kansas Department of Labor, for these companies to charge the $50 settlement fee per beneficiary.
Unfortunately, even though the employer and the investment counselor have given a valiant effort to stop this, it is going to occur before everything can be settled and checks can be mailed out. I just hope that no one else has to learn the hard way what I wish I had been able to avoid. Had we known that this was going to happen, we would have changed things to avoid this mess-up. This is not the way my husband would have wanted his 401K to be disbursed but that is how it will be.
Leanna Carman
Lebo
hottopics (anonymous) says...
I learned that even if you have a will stating cremation or KU Med donation that they wont do it unless you have signatures. My father in law passed and had a will but we could not see to his wishes because signaturesn of all children were still needed. It was a huge mess for us as we were forced to pay for burial because distant siblings wouldnt lift a finger to help with it or expense.
So you may think you have all your affairs in order when in fact you dont and its a shame for you and your family like it was with ours.
April 12, 2008 at 9:16 p.m. ( permalink | suggest removal )
create (anonymous) says...
Sorry for your loss, Mrs. Carman. Thank you for the reminder to us to check our records.
Here's another idea for the Gazette to have a guest lawyer answer questions. I'm guessing there would be a ton of them, but you could focus on just the sort of questions that relate to the above column and hottopics dilemma.
April 13, 2008 at 8:02 a.m. ( permalink | suggest removal )