Mom died listing her 3 kids as beneficiaries on a 401k/IRA Annuity. One of the beneficiaries owes her $20k and she wanted it deducted from his share of any money in the estate.

Since she listed the 3 as beneficiaries is there anyway of putting his share into her estate rather than John Hancock sending him his portion directly and not paying back the promissory note? Is it possible to put the entire annuity into her estate for distribution rather than paying out each individual listed as beneficiaries?

  • Are there any other assets, or just the IRA? – D Stanley Nov 26 '18 at 19:10
  • Welcome new user. Unfortunately it "just doesn't work like that". No "personal judgement" is applied by the custodians in question. – Fattie Nov 27 '18 at 7:54

What you are trying to do is not possible. The IRA custodian has received instructions to liquidate, upon death, the account in a certain way. They are required to do so by law.

Also, what you are trying to do, is not following the instructions of the deceased, your mom.

The promissory note becomes an asset of the estate. The owing child should pay the estate 20K, and that, with any other assets, should be divided equally. For a moment let us assume that there are no other assets. The owing child could pay the other two $6667 each for the lien to be satisfied.

Sorry for your loss.

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    Which is how it should be. If he paid before her death he would also receive a third of that money. – xyious Nov 27 '18 at 18:58

The insurance company is going to make the pay out to the beneficiaries designated by your mother. It is of no concern to them if the listed parties have debt(s).

If the beneficiary of her 401k/IRA Annuity was her estate (herself) or her trust then the executor of her estate would make the adjustments that you described.

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