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Can someone who has left the company deplete all his pension funds from that company before he dies?

Additional Information:

My ex is an alcoholic and died one. I believed he knows he does not have long to live, when he was given the package to leave the company, was he allowed to take all his 401K and Pension Fund out before retiring age? He was 47 when he died and it was 2 years after he left the company. Is he entitled to take all the funds and spend since he knows he has not much time to live? He has a son who was a minor when he passed. We just realized that his Trustee had not informed his company about his death so I believed there might be some money left for his son now since he had not received any?

ATTORNEY ANSWER:

Once a person retires, the retiree can either roll the money out of the pension plan into an individual retirement account (IRA) or leave the money in the company’s plan, provided the company’s pension plan allows for that option. Your ex could have very easily spent all of the money from the pension plan. There is no prohibition from withdrawing the money early. He would have had to pay an early withdrawal penalty and taxes.

He also may have left the money in the pension plan.  The executor should contact the plan administrator.

Margaret L. Cross-Beliveau, Esq., LL.M.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.

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