Legal Question in Wills and Trusts in California
My niece is the beneficiary of her aunt's 401-k at Fidelity. The aunt has passed away. The aunt had a small business where she had opened a solo 401-k at Fidelity where she was the only participant as well as the administrator of the 401-k plan. While she designated my niece as the beneficiary of her 401-k account, she failed to appoint her also as alternate administrator. Now, Fidelity says that since there is no administrator of the plan, they cannot distribute the money to my niece. who is clearly designated as the beneficiary. They say that she needs to go through a probate?
Has any one of the lawyers have actual experience of a similar case and can we get some guidance.
3 Answers from Attorneys
Financial institutions almost always insist that a probate be filed ; the small estate procedure doesn't satisfy their legal department. Sounds like she needs to see a probate specialist ASAP.
Fidelity is right. There is no one authorized to transact the business of the 401(k) plan until the estate is probated and the administrator of the estate is appointed.
Mr. McCormick is correct. Because no successor administrator was appointed, no distribution can be made. A petition in Probate will need to be filed. The Probate petition should request that the Court appoint an administrator of the estate (or the named executor, if the deceased had a will). In addition to any other necessary requests, the Petition should also request that the estate's administrator/executor be granted the specific authority to administer the 401k.
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