What Happens If There Is No Beneficiary on a 401(k)?


Quick Answer

If there is no beneficiary on a 401(k) of a person who dies, then the benefit either goes to a default beneficiary such as a spouse or child, as determined by the 401(k)'s policy, or the benefit will go to the estate of the employee, notes the website for Kirsten Howe, attorney at law. There is typically a plan document in the policy of the 401(k) that designates whether the benefits will go to a default beneficiary or the estate.

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Full Answer

It is usually the case that the owner of a 401(k) will designate a beneficiary to the benefits should he or she die. This means that the owner of the plan will decide to whom the plan will go to upon the death of the owner. If the owner of the plan dies before he or she designates a beneficiary, then there are a number of different results that can happen to the plan, which is dictated by the specific 401(k) contract of the plan owner.

Many 401(k) plans have a policy that designates a default beneficiary in the event that no beneficiary has been listed. This beneficiary is usually a surviving spouse or other family member. If there is no designated default beneficiary, then the benefits will be distributed to the estate of the plan holder. If the plan holder died before receiving any distributions, then the distributions must be dished out to the estate within 5 years, according to the Howe website.

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