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The 401K plan is designed for an employee's retirement. But, what happens to the 401K if the employee dies?


The 401K plan that has been carefully thought out is designed to provide for the retirement years. The employee has contributed to the plan expecting it to pay for expenses during his later years. What happens if he dies before he can benefit from his plan?

What Happens to My 401K After Death?

If the owner of the 401K plan dies and was married at the time of death his spouse receives the benefits. Even if the employee designated a person other than his spouse when he signed up for the 401K plan, the spouse inherits the benefits.

How Can the Employee Designate a Beneficiary Other Than His Spouse?


If the employee does not intend his spouse to be the beneficiary of his 401K the only way to avoid it is to have the spouse sign a waiver relinquishing all rights to the plan. The only way the spouse may not receive the benefits is to have signed a waiver giving up all rights to the plan at the time the plan was joined. Again, it does not matter who the employee may have named as his beneficiary unless the spouse has signed a waiver of rights. For the single or widowed employee his named beneficiary or beneficiaries will benefit from the plan.

Are There Exceptions to the Spousal Beneficiary Rule?

There is one exception to the spousal rule. The Federal government does not recognize same sex marriages at this time and in this instance. For that reason a same sex spouse cannot claim the benefits of the 401K plan unless that person is the named beneficiary on the plan. The rules are rigid and should be considered when first signing up for the 401K plan with the employer. At this time there are no exceptions to the governing rules determining the beneficiary of the 401K plan.