05 Oct I think my mother left a retirement account to me. How can I find out?
Q. My mother and father had retirement funds. My father passed and it went to my mother. My mother got remarried and she had a will when she died. My step-father is to get what they agreed upon. She never made him the beneficiary of that retirement fund that was between my mother and father, but when I asked to see the amount of this fund, the executor would not produce it. How can we find out the amount?
A. You have several options.
Generally, retirement accounts are “non-probate” assets, said Adam L. Sandler, an attorney with Einhorn. Barbarito, Frost & Botwinick in Denville.
That means they pass by beneficiary designation and not under the account owner’s will, Sandler said.
“Each designated beneficiary can directly contact the financial institution where the account is held and claim his or her share of the death benefit,” Sandler said. “The financial institution will require a copy of the account owner’s death certificate to proceed with the claim.”
If the retirement account owner fails to designate a beneficiary, then the agreement or contract governing the account may dictate to whom the death benefit is paid, Sandler said. In many instances, the governing document states that the death benefit is payable to the account owner’s estate, but some do specify a hierarchy of beneficiaries that resembles the succession of heirs under intestacy, he said.
Sandler said if your mother did not designate a beneficiary on her retirement account and as result, it is payable to her estate, then it becomes a “probate” asset and will governs who receives it.
“If her will did not specifically bequeath that account to specified individuals, it likely becomes part of her `residuary estate,’” he said. “The clause typically says, `I give the rest, residue and remainder of my estate to…;’”
Residuary beneficiaries are entitled to information about the estate, including the value of estate assets, Sandler said. Moreover, he said, they have rights and remedies under the law to ensure that the executor is adhering to his or her fiduciary duty.
“When an executor refuses to disclose reasonable information to the beneficiaries regarding the estate and the status of the administration, the beneficiaries should consult with an attorney who specializes in estate administration to explore their options,” he said. “This may include bringing an action in court to compel the executor to file an accounting and/or an inventory and appraisement of the estate assets.”
It is important to note that courts may be reluctant to order an accounting within one year of the executor’s appointment unless good cause is shown, he said.
Additionally, when an executor is in a position to wind up the estate and distribute the assets to the beneficiaries, prior to making distributions to the beneficiaries, the executor will typically ask each beneficiary for a release of all claims arising out of the executorship and a waiver of a formal judicial accounting.
“If a beneficiary believes that the executor has acted improperly or if the executor refuses to disclose information about the estate, he or she should demand that the executor provide an accounting and then file an action with court for an accounting if the executor refuses,” he said. “Beneficiaries should not blindly trust an executor, especially those who refuse to provide information about the estate.”
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This story was originally published Oct. 5, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.