Death Benefit Guide

Here’s a step-by-step guide to notify NestEggs of a participant's death and claim the benefits:

Before contacting NestEggs, ensure you have the following documents and information readily available:

- Death Certificate: You will need a certified copy of the participant's death certificate.

- Deceased’s Personal Information: This includes the participant’s full name, Social Security number, and date of birth.

- Your Relationship to the Deceased: Proof of your relationship to the deceased (such as being listed as a beneficiary or an executor of the estate).

- Proof of Identity: Your personal identification (driver’s license, passport, or any other valid government-issued photo ID).

Notify NestEggs of the Participant’s Death using the web submission form here - Death Notification Form

Submit the death certificate: Upload a copy of the death certificate as proof of death.

NestEggs will check the 401(k) account for the designated beneficiary. This is the individual or individuals who the deceased named to receive the retirement account funds. In many cases, this information was already set up by the participant during their employment.

If you are the named beneficiary, NestEggs will provide you with further instructions. If no beneficiary is listed, or if the beneficiary has also passed away, the funds will typically pass to the participant’s surviving spouse or surviving children. If the participant does not have a surviving spouse or children, their benefits are typically awarded to their estate.

Along with the death certificate, NestEggs may need supporting documentation of the relationship to the deceased (marriage or birth certificate). It is recommended that you submit supporting documents to NestEggs as early in the process as possible to avoid delays.

Confirming the beneficiary information can take several weeks depending on the complexity of the estate and whether the necessary documentation has been submitted to NestEggs in good order.

After beneficiaries have been confirmed, NestEggs will establish an account in the plan for each beneficiary and online access will be made available where they can view their balance and manage the investment allocation while deciding how to receive the benefits.

Beneficiaries have options on how to receive the retirement plan benefits:

- Lump-Sum Distribution: You can take the entire amount as a one-time payment, but this may have tax consequences.

- Rollover: You can roll the retirement funds into another retirement account, such as an inherited IRA. This option often allows for the funds to continue growing tax-deferred.

- Partial Payments: Some plans offer the option to receive partial payments while leaving the remainder in the plan.

- Lump-Sum Payments: These are typically subject to income tax, and possibly early withdrawal penalties if the deceased was under age 59½ at the time of death.

- Rollover: If you roll over the retirement funds into an inherited IRA, you can delay taxes until you begin withdrawing the funds.

- Consult a Tax Advisor: It’s recommended to consult with a tax advisor to fully understand the tax implications of receiving retirement plan benefits. NestEggs does not provide tax advice.

- Distribution form: NestEggs will provide you with the necessary distribution forms to begin the process of receiving the retirement plan funds. The distribution forms can be sent to you via email or paper versions can be mailed.

- Complete the forms: Fill out all required sections of the distribution form, which will ask for personal information and details on how you wish to receive the benefits (lump sum, rollover, etc.).

- Processing Time: Processing usually takes up to 3 business days after your form has been determined in good order and has been approved.

This does not include the time it will take for the benefit check to be mailed to your address from Charles Schwab in Austin, TX.

Important: The account will remain invested during the distribution form review process and subject to market fluctuations. If you're concerned about potential losses, you can log into your NestEggs beneficiary account and adjust your investment allocation to a less volatile option.

Once the distribution is approved, you will receive the 401(k) benefits according to the option you selected (lump sum, rollover, or installment payments).

- Multiple Beneficiaries: If multiple beneficiaries are named, NestEggs will divide the funds as specified by the deceased’s beneficiary designations.

- Estate as Beneficiary: If no beneficiary was named and there is not a surviving spouse or surviving children, the retirement plan funds may go to the deceased's estate. In this case, the executor of the estate will handle the distribution of funds, following state laws.