401k questions

OldMusicGuy

You need to identify the current company that owns the company he worked for and see if you can work backwards from there. You cannot identify a 401k/IRA from just an SSN.

If you cash in a 401k/IRA before you are 59 1/2 you pay a 10% penalty, so it's unlikely a 56 year old would have cashed it in, but you will have to check with the plan provider. It is most likely to have been rolled over into an IRA.

Google is your friend. This is a good site that explains how 401k benefits are inherited: https://www.fidelity.com/viewpoints/personal-finance/401k-inheritance-tips

The beneficiary will also pay a 10% penalty if they withdraw the cash before they are 59 1/2, see https://www.thebalance.com/inherited-401k-distribution-and-withdrawal-rules-2388269

EdSwippet

TcpnT wrote: »

Any ideas on how to track down where the plan might be held? The statement does have a US social security number - would there be any way to track it down via that?

Some suggested avenues here: http://www.401khelpcenter.com/faq/faq_39.html

TcpnT wrote: »

I have been in contact with Equiniti who sent forms and a request for ridiculous amounts of supporting paperwork in order to transfer the account to his wife. It would also require a medallion guarantee stamp which I understand will cost at least £400. ... Do you agree with my assessment that it will not be worth the time, cost and effort.

Before giving up, I would see if Equiniti will let you negotiate away the medallion requirement. You lose nothing by asking, and since the account is worth not much more than the expense of their over-zealous paperwork, they might be flexible here.

I don't know offhand of any requirement for a medallion guarantee -- and I am pretty sure I did not need one for the estate I did five or six years ago, although the US congress passes, on average, one tax law change every day! -- so it could be mostly butt-covering rather than any regulatory thing.

TcpnT

Before giving up, I would see if Equiniti will let you negotiate away the medallion requirement. You lose nothing by asking, and since the account is worth not much more than the expense of their over-zealous paperwork, they might be flexible here.

I don't know offhand of any requirement for a medallion guarantee -- and I am pretty sure I did not need one for the estate I did five or six years ago, although the US congress passes, on average, one tax law change every day! -- so it could be mostly butt-covering rather than any regulatory thing.

Thanks for the info.

Equiniti sent a clear list of requirements and the stock power form requires a medallion stamp for the signatures at the bottom. This is in addition to:

- Court certified document appointing executors
- Court certified copy of the will
- Affidavit from executor confirming residence and value less than $60,000

My plan was to contact them once more and say that I would not be going through their process considering the small value and asking if any kind of waiver was possible. If not forget it.

EdSwippet

TcpnT wrote: »

- Affidavit from executor confirming residence and value less than $60,000

This $60k is the magic -- and pathetically low -- general US estate tax exemption for non-resident aliens. Equiniti's requirement here sort-of suggests that if you can wade through the rest of their turgid process, you might perhaps escape the requirement to file a US non-resident alien tax return form 706-NA as well. For aggregate US assets below $60k there would be none due with or without a US estate tax treaty, making a 706-NA moot.

Just noticed that you also mention Fidelity. The case I handled five or six years ago was with them, and at the time I am pretty sure they did not require a medallion signature guarantee, only the sort of certificates you mention above. So worth contacting them as well, I think. They might be more user-friendly -- or more accurately, less user-hostile -- than Equiniti.

One lesson for others in all of this might be to make sure one's spouse knows or has access to passwords for any US online accounts. That way, if the worst happens they can log in, sell up, and transfer the cash out before informing the US broker of the account holder's death.

Probably not strictly 'kosher', but a heck of a lot cheaper and easier and with the identical outcome. The US/UK estate tax treaty protects UK nationals up to around $11MM of assets and far beyond the miserly $60k permitted to investors in countries without a decent US estate tax treaty.