My question involves estate proceedings in the state of: SC
Hello,
I am looking for some clarification and advise regarding a 401K account. The 401K account belongs to my Aunt who resided in the state of South Carolina and she passed away in October 2016. I am the only beneficiary for her 401K account and I reside in the state of Georgia.
She was not married at the time of her death. However, she has an executor for her accounts and estate. The executor has filed the necessary documents in November 2016 with the probate court in the town/county in South Carolina to
handle her estate, creditors and other claims.
401K related details:
1. Company: Prudential Retirement
2. Aunt's Employer sponsored program
3. The account is fully vested. My Aunt started this account in 2004 and in 2007 her employer switched this account to Prudential
4. Approximate amount in the account as of now: $25,000
5. My Aunt took a loan in September 2014
6. Outstanding Loan amount: $8,000
7. This loan fell into default upon her death
8. Prudential's claim assistants informed, either myself as a beneficiary or my Aunt's estate don't have to pay this loan amount back. However the tax component will be deducted before the beneficiary receives the final settlement
9. Prudential has sent me the Beneficiary Claim Form
Probate court and Estate related details:
1. The Executor sent a copy of the Will to my Aunt's relatives within 2 weeks of her death
2. The Executor has advertised the legal notice for the creditors to file the claims
My questions:
1. Can I officially file a claim with probate court against her estate for the 401k defaulted loan amount
2. Should Prudential send the 1099R form to the estate or should I get it from Prudential and send it to the Estate
3. If not the full loan amount, can the tax component for this loan amount be filed as a claim to the estate/probate court?
4. Will the Federal tax be applied to the remaining amount in 401k ($25,000) or for the whole amount $33,000 (including defaulted loan of $8,000)?
5. If I choose to receive one lump sum distribution (I am not planning for an IRA account now), when I file my personal tax return, will I incur both federal and state tax for this money?
Thanks,
SP
Hello,
I am looking for some clarification and advise regarding a 401K account. The 401K account belongs to my Aunt who resided in the state of South Carolina and she passed away in October 2016. I am the only beneficiary for her 401K account and I reside in the state of Georgia.
She was not married at the time of her death. However, she has an executor for her accounts and estate. The executor has filed the necessary documents in November 2016 with the probate court in the town/county in South Carolina to
handle her estate, creditors and other claims.
401K related details:
1. Company: Prudential Retirement
2. Aunt's Employer sponsored program
3. The account is fully vested. My Aunt started this account in 2004 and in 2007 her employer switched this account to Prudential
4. Approximate amount in the account as of now: $25,000
5. My Aunt took a loan in September 2014
6. Outstanding Loan amount: $8,000
7. This loan fell into default upon her death
8. Prudential's claim assistants informed, either myself as a beneficiary or my Aunt's estate don't have to pay this loan amount back. However the tax component will be deducted before the beneficiary receives the final settlement
9. Prudential has sent me the Beneficiary Claim Form
Probate court and Estate related details:
1. The Executor sent a copy of the Will to my Aunt's relatives within 2 weeks of her death
2. The Executor has advertised the legal notice for the creditors to file the claims
My questions:
1. Can I officially file a claim with probate court against her estate for the 401k defaulted loan amount
2. Should Prudential send the 1099R form to the estate or should I get it from Prudential and send it to the Estate
3. If not the full loan amount, can the tax component for this loan amount be filed as a claim to the estate/probate court?
4. Will the Federal tax be applied to the remaining amount in 401k ($25,000) or for the whole amount $33,000 (including defaulted loan of $8,000)?
5. If I choose to receive one lump sum distribution (I am not planning for an IRA account now), when I file my personal tax return, will I incur both federal and state tax for this money?
Thanks,
SP
401k - Beneficiary - Loan Amount, Probate Court and Tax Clarification
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