• Facebook
  • Youtube
  • Linkedin
  • Twitter
  • Instagram
  • Vk
Call Us At: (408) 553-0801
Lonich Patton Ehrlich Policastri
  • Home
  • About
    • Why LPEP
    • Our Attorneys
    • Locations
      • San Jose
      • Santa Cruz
      • San Francisco
    • Testimonials
  • LPEP Spotlight
  • Practice Areas
    • Family Law
      • Annulments
      • Certified Family Law Specialists
      • Child Custody and Visitation
      • Child Support
      • Divorce and Your Estate
      • Divorce Litigation
      • Divorce Planning
      • Domestic Partnerships
      • Domestic Violence
      • Enforcement and Modifications
      • Extramarital Affairs
      • Grandparents’ Rights
      • Harassment
      • Legal Separation
      • Mediation and Collaborative Divorce
      • Parental Relocations
      • Paternity
      • Postnuptial Agreements
      • Prenuptial Agreements
      • Property Division
      • Restraining Orders
      • Same Sex Divorce
      • Spousal Support and Alimony
    • Estate Planning
      • Business Succession Planning
      • Power of Attorney
      • Probate
      • Trust Administration
      • Trust and Probate Litigation
      • Trusts
      • Wills
  • FAQ
    • Estate Planning FAQ
    • Family Law FAQ
  • Blog
  • Pay Now
  • Resources
    • Family Law Resources
    • Family Law Terms
    • Estate Planning Resources
  • Contact Us
    • Careers
  • Get a Free Consultation
  • Menu
Paper on clipboard with IRA on a chart background. retirement accounts
Michael Lonich

What to do With Retirement Accounts After Death

August 31, 2023/in Estate Planning /by Michael Lonich

By the time some people reach retirement age, they have accumulated a substantial nest egg consisting of 401k’s, pensions, and IRAs. They saved with the intent of having a comfortable lifestyle during their golden years. But what happens to an individual’s hard-earned assets once they pass away? Understanding what happens with retirement accounts after death can help provide peace of mind for the account holder and their loved ones.

After someone passes away, the first step is locating all of their retirement accounts and contacting the financial institutions. If the deceased named a beneficiary for their accounts, the assets will go directly to them without needing to go through probate. However, the funds will become part of the deceased’s estate if there is no beneficiary. In that event, they will need to go through probate.

Probate is the legal process that involves authenticating the deceased person’s will, if one exists, and settling their estate, which includes paying debts and distributing assets to heirs or beneficiaries.

The duration of the probate process can vary widely depending on the complexity of the estate, taking anywhere from several months to a couple of years.

The relationship between the deceased and the beneficiary can also impact what happens to the retirement accounts. A spouse is able to transfer the funds of a 401k or IRA into their own IRA. Or, they can choose to take it over. In that event, there are three options:

  • It can stay in the account until the employee has turned 72
  • The spouse can take distributions based on their own life expectancy 
  • They can follow the 10-year rule, which states the account must be emptied by the tenth year following the deceased’s death.

Non-spouse beneficiaries of an inherited IRA have different rules based on whether they are a designated beneficiary or an eligible designated beneficiary.

A designated beneficiary is a person whom the deceased named to inherit the balance of an IRA or other type of retirement account. They can be any person chosen by the account owner

On the other hand, an eligible designated beneficiary is a specific classification, such as:

  • surviving spouse
  • a disabled or chronically ill individual
  • an individual who is not more than ten years younger than the IRA owner
  • a minor child of the IRA owner

One key difference is that a designated beneficiary is required to follow the 10-year rule. Furthermore, any distribution from the account is considered taxable income.

However, eligible designated beneficiaries have different rules that allow them to stretch out distributions over their lifetime or the deceased’s, providing potential tax benefits.

Navigating the rules for inherited retirement accounts can be complex. Each person’s situation is unique, so getting professional advice is essential. Our attorneys at Lonich Patton Ehrlich Policastri have the expertise you need and can help ensure that your retirement accounts are part of your estate plan. Contact us for a free consultation by calling 408-553-0801 so you can protect your family’s financial future.

 

 

Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

 

Michael Lonich

Avatar photo

Specializing in Divorce and Estate Planning, I am San Jose Attorney, Michael E. Lonich; and I have been battling for client’s rights for nearly 40 years. When focusing on divorce, child custody, and related matters, I know all too well the emotional and financial toll divorce has on clients. Integrity, common sense, and a passion for what I do which guarantee the best possible results for my clients. Resolution of family law issues requires an attorney able to navigate the myriad legal and emotional issues presented in cases. Financial issues, child custody, domestic violence, valuation of property, analysis of RSUs, hidden assets, spousal and child support, all may require trial, mediation, or a collaborative effort with the parties. Regardless, each client gets the individualized attention they require. Every family law case is unique, we partner with you to develop a comprehensive approach to get the best results.

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share by Mail
https://www.lpeplaw.com/wp-content/uploads/2023/08/bigstock-Paper-On-Clipboard-With-Ira-On-477014415.jpg 566 900 Michael Lonich https://www.lpeplaw.com/wp-content/uploads/2021/05/LPEP_PC.png Michael Lonich2023-08-31 22:39:562023-08-31 22:41:14What to do With Retirement Accounts After Death
Learn more about estate planning with a free resource
Read all about family law and child custody
Learn more about family law matters such as private divorce counseling.

Categories

  • 2021
  • 2022
  • 2023
  • 2024
  • 2025
  • Business Law
  • Estate Planning
  • Family Law
  • Firm News
  • In the Community
  • News
  • Personal
  • Probate
  • Spotlight

Posts From The Past 12 Months

  • June 2025
  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024

Explore Our Archives

Free 30-Minute Family Law or Estate Planning Consultation

4 + 1 = ?

Contact Us

LONICH PATTON EHRLICH POLICASTRI

1871 The Alameda, Suite 400, San Jose, CA 95126
Phone: (408) 553-0801 | Fax: (408) 553-0807 | Email: contact@lpeplaw.com

LONICH PATTON EHRLICH POLICASTRI

Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com

1871 The Alameda, Suite 400
San Jose, CA 95126

Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.

MAKE A PAYMENT BY SCANNING THE QR CODE BELOW:

DISCLAIMER

This web site is intended for informational purposes only and is not legal advice. Nothing in the site is to be considered as either creating an attorney-client relationship between the reader and Lonich Patton Ehrlich Policastri or as rendering of legal advice for any specific matter. Readers are responsible for obtaining such advice from their own legal counsel. No client or other reader should act or refrain from acting on the basis of any information contained in Lonich Patton Ehrlich Policastri Web site without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue.

About | Why LPEP | Contact | Blog

© 2024 Lonich Patton Ehrlich Policastri. All rights reserved. Privacy Policy

When Can You Get an Annulment in California? California law with gavel and stack of documents. annulment in California September 2023 LPEP Spotlight: Leah Klassen
Scroll to top

LPEP COVID-19 Office Protocol