A plan participant died in 2002 at age of about 35. Unmarried, no kids, no will, no beneficiary designation, nothing - about all he had was his retirement account and a beat up old truck. Since there was essentially nothing there, the family never formally went through probate or took any legal action.

He was taken care of in the end by his brother and sister-in-law, who would like to get his money. The owner of company (plan sponsor) feels very strongly that he would like to get the participant's money to the family. As of yesterday, his total account balance was $382.54.

Can they write a check to the participant and let the family do what they want with it? How about writing the check to the "Estate of..."? Any othee suggestions?

Step One - What does the plan document say about distributions when no beneficiary is designated?

Well, that's the problem. Plan document says "If there is no designated beneficiary ... the participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the participant’s death." But I can't find anything that tells me how we accomplish this.

Look at the plan provision for designating a beneficiary. It should say who the beneficiary is if one is not designated. The terms vary from document to document, but I don't remember ever seeing a document that did not say something on the subject.

Cynchbeast,

Some plan documents will have tucked the designation of beneficiary, and default beneficiary, rules into sections entitled something like 'Participant Administrative Provisions'.

If the beneficiary turns up to be the estate and it normally does under these circumstances, then the brother & sister-in-law may be able to claim under the state's small estate provisions of the probate law as long as they would be the legal beneficiaries of the estate.