A friend's father died 10 years ago while she was a minor of 13. She was named as the beneficiary of the father's 401K. Her father and her mother were separated and she lived with her mother. Her mother had agreed and signed papers making the daughter the sole beneficiary of the 401K. At the time of his death, the father had no will. However, her step sister who was an adult contacted the father's place of employment and arranged the payout of the 401K presumably for my friend. The step sister approached friend and had her sign a release of some sort allowing her to assume control of the money. (It is understood that under New York Law that this is illegal as my friend was 14 at the time and a minor.) The mother was in fact the legal guardian and was never approached for her permission.
The questions therefore are:
·D 1. Does the 401K provider have a fiduciary responsibility to do minimum due diligence to determine to whom it pays out the benefits and if that person has legal authority to collect those benefits?
· 2. .Is the 401K provider liable for its failure to protect the beneficiary in the distribution of the 401K benefits?
Any help would be appreciated.
Bob
