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Does a 401k go through probate?

February 21, 2018 by Greg Port, J.D., M.B.A.


When a loved one passes away, there is a lot to consider. Not only do you have to deal with the grief of their passing, but if you are named as executor, then you have the added stress of dealing with their estate. When someone passes, most of their assets will go through the probate process. In the probate process, the will is validated by the courts, or if there is no will, the courts will decide how the assets of the estate will be divided up.

However, while some estates are fairly straightforward, there is one question that almost every family has - what happens to the retirement accounts?

Retirement Accounts and Probate

notepads, calculator and savings bank on desk

Retirement accounts such as IRAs, 401ks, and 403bs are common among both the young and old. Everyone wants to save up money for their golden years of retirement, but sadly not everyone gets to live long enough to use it. However, these retirement accounts can amass quite a fair amount of money, but not everyone knows what happens to it after someone passes away.

In truth, funds in retirement accounts such as 401ks don't go through the probate process. Retirement accounts don't go through probate because part of the paperwork to even open a retirement account includes naming a beneficiary.

This is a contract that overwrites even a will that states where the company administering the retirement account should send the money if the original owner passes away.

The benefit of this is since the retirement accounts don't need to go through probate, they aren't technically considered part of the estate. This means that creditors cannot collect debts from it and it does not get tied up in the courts. So if an estate is disputed, the beneficiary of the retirement accounts or other items that require a named beneficiary such as life insurance will likely still get their payout in a timely manner.

What can you expect from probate? Download our free guide.

How Retirement Accounts End Up in Probate

While in most cases retirement accounts don't end up in probate, there are a few ways it can happen. This also means that debt collectors for an estate might be able to use the funds in a retirement account to settle their debts, too. This is why it is best to avoid these mistakes to keep retirement accounts free and clear of probate. 

Naming a Minor as a Beneficiary

Money can be left to a minor, but they can't use it until they come of age. In this situation, in order to avoid probate, someone already needs to be assigned to manage the money until the minor comes of age. If no such party is stated, the probate court will get involved to set up a court supervised custodial account.

No Alternate Beneficiaries

If your primary beneficiary is no longer living, if you have no alternate named, then it will need to go through probate. The funds then become part of the estate and are divvied out to everyone else.

Beneficiary is the Estate

If you name your estate as the beneficiary, the funds will be probated.  This may cause creditor and tax issues.  It is usually recommended that you not leave these types of funds to your estate.  

Need Probate Help?

The probate process is never particularly easy. This is why it is nice that in most cases, retirement accounts are not included in it. However, if you need help with probate, call us for a free consultation.

If you want to make the whole thing a little smoother, then you need a skilled probate lawyer at your side.

Our consultations are completely free of charge and intended to equip you to make the best decision.


Topics: Probate, Succession Planning, Ohio Probate Lawyer

Greg Port, J.D., M.B.A.

Written by Greg Port, J.D., M.B.A.

Port Legal founding attorney, Gregory Port has over 30 years experience. He has provided strategic corporate law representation in Central Ohio to clients since 1990. Gregory Port is a lawyer actively practicing in the areas of probate, estate planning, and real estate. His experience and core values are the cornerstones of Port Legal as a specialized advocate for your interests.