Hi everyone,

I wanted your opinion on the following situation, as in light of the circumstances below, I advised to client to obtain ERISA counsel. I was questioned by our in-house contact to the client on this (I think they figured that as TPA we would know how to proceed).

If you could let me know that it was the right thing to do, I'd appreciate it. Or, maybe, this was a situation that occurs often but we don't see?


The situation:

2 Owners, husband and wife. Both over 70 1/2 in a PSP. Husband dies and wife is the bene. Wife dies 3 months later without taking any of the bene money.

Neither had ever taken any MRD's and should have been for probably the past 10 years.

Estate has bene's - the 3 children. Per the trust, husband's $ goes to his trust (passed to bene but she died prior to taking) and wife's goes to her children since no living bene, so techincally both proceeds go to same people

2 out of 3 children are questioning their options. client thinks the 3rd will not as he is "mentally incapacitated". i advised them that they had until 9/30 to make a choice, and that technically since we were past the beginning date of the mrd's that the $ must come out at least as quickly as the MRD's would. After that, I was clueless.

what would you do in this situation? thanks for the replies!

IANAL, this situation appears to touch on many issues. Seems like the above advice is the correct suggestion. As TPA, you do not want to try to solve it. (Even if you could, very possible that you would not get paid for your time.)

This fact pattern raises several complex issues under both IRC and trust and estates law that is best left to counsel for the estate, including the failure to take MRDs, proper bene under the trust documents and plan beneficary designations, disability which may require appointment of a guardian, etc.

Short digression, please. What is IANAL?

Everyone, thank you for your replies - I'm glad it was the right decision.

1) I am not a lawyer; or

2) I am not a liar [this is not redundant in spite of some opinions]; or

3) I absolutely never advise leprechauns.