What Happens to Retirement Account After Death

The Account Gets Frozen — and Stays That Way Until You File a Claim

When a financial institution learns an account holder has died, it often restricts access to a sole-owner retirement account and pauses distributions or contributions. Beneficiaries and executors generally need to complete the institution's death-claim process before the account can be transferred.

These restrictions are part of the custodian's or plan's security procedures, not a universal legal requirement. The problem is that nobody tells the family how long the process takes or what paperwork is needed. The custodian waits for you to call them.

Step One: The Beneficiary Designation Controls Everything

Retirement accounts — 401(k)s, IRAs, pensions, superannuation — don't follow the will. They pass directly to whoever is named on the beneficiary designation form, which the account holder filed with the custodian, sometimes decades ago.

This means the will can say one thing and the retirement account does something else. A father's will might split everything equally among three children, but if he named his second wife as sole beneficiary of his 401(k) twenty years ago and never updated it, she gets the full account.

The beneficiary designation also overrides state intestacy laws. Even if there's no will, the named beneficiary on the account takes priority.

If no beneficiary was ever designated — or if the named beneficiary died before the account holder and no contingent was named — the account defaults to the plan's own rules. Most plans direct the balance to the surviving spouse first, then to the estate. When it goes to the estate, it enters probate.

What the Custodian Needs From You

Contact the bereavement or estate services department (not general customer service) and provide:

• Account holder's full legal name, date of birth, and Social Security or National Insurance number
• Date of death
• Your relationship to the deceased
• Your own identification

They'll send a death claims packet — a set of forms specific to that institution — and request documentation. At minimum, expect to provide a certified death certificate with a raised seal and either proof of beneficiary status (if you're a named beneficiary) or Letters Testamentary/Letters of Administration (if you're the executor claiming through the estate).

Some custodians have additional requirements. Primerica requires death certificates that explicitly state the cause and manner of death. Vanguard requires its own Form S737. Employer 401(k) plans use plan-specific forms that come from the HR department, not the record keeper's website.

How Long the Process Takes

Standard beneficiary claims with clean paperwork — a single named beneficiary, certified death certificate, completed claim forms — typically process in two to six weeks.

Complex claims take longer:

• No beneficiary on file: the custodian must verify the plan's default provisions, which may require probate court documents (Letters of Administration). This adds two to four months.
• Multiple beneficiaries: each beneficiary must submit their own claim forms and elect their own distribution method. The custodian won't process anyone's claim until all beneficiaries have filed.
• Trust as beneficiary: the custodian needs a copy of the trust document, must verify it qualifies as a see-through trust, and determine the oldest trust beneficiary's age for distribution calculations.
• Disputed beneficiary designation: if family members contest the designation, the custodian may interplead the funds into court and wait for a judicial decision — a process that can take a year or more.

What Happens to the Money: US Retirement Accounts

Traditional IRA or 401(k): Distributions to beneficiaries are taxed as ordinary income — the same way the original owner's withdrawals would have been taxed. The tax rate depends on the beneficiary's total income in the year of withdrawal.

Most non-spouse beneficiaries must empty the account within 10 years of the owner's death (the SECURE Act 10-year rule). Surviving spouses can roll the account into their own IRA and defer distributions until their own retirement.

Roth IRA or Roth 401(k): If the account has been open at least five years, distributions to beneficiaries are completely tax-free. The 10-year depletion rule still applies for non-spouse beneficiaries, but there's no tax consequence.

Year-of-death RMD: If the owner had reached their Required Beginning Date (for an IRA, age 73 for people born 1951–1959, age 75 for those born in 1960 or later, and an earlier age for prior cohorts; a 401(k) may allow a non-5%-owner who is still working to delay until retirement) and hadn't completed their full required minimum distribution for the year, the beneficiaries must take the remaining amount by December 31 of the year of death.

What Happens: UK Pensions

UK defined contribution pensions generally pass to beneficiaries free of income tax if the member died before age 75 and the two-year rule is met; tax-free lump sums are limited by the remaining LSDBA. After age 75, distributions are taxed at the beneficiary's marginal income tax rate, up to 45% in England, Wales, and Northern Ireland and 48% in Scotland. Defined benefit schemes typically provide a survivor pension — usually 50% of the member's pension — to the surviving spouse or civil partner.

What Happens: Canadian RRSPs and RRIFs

Canada treats the full value of the RRSP or RRIF as if it were cashed out immediately before death. The entire balance is reported as income on the deceased's terminal tax return, often at the highest marginal bracket. Surviving spouses and financially dependent minors can roll the proceeds into their own RRSP to defer the tax.

What Happens: Australian Superannuation

Superannuation death benefits are distributed by the fund trustee — not through the will — based on the member's Binding Death Benefit Nomination. Benefits paid to a tax dependant (spouse, minor child, financial dependant) are tax-free. For non-dependants (such as independent adult children), the taxable component can be taxed at up to 17% for a taxed element or 32% for an untaxed element, including the Medicare levy.

Processing times for Australian super death benefit claims have drawn regulatory criticism: an ASIC report in 2025 found some claims taking over 500 days to finalise, with poor communication from funds throughout.

The One Thing to Do Today

Find the account. Check the deceased's most recent tax return — Form 1099-R (US), P60 (UK), T4RSP/T4RIF (Canada) — for retirement account activity. Contact each institution's bereavement department, request the claims packet and a date-of-death valuation, and start assembling death certificates.

The Retirement Account Claims toolkit walks through the full claim process for 401(k)s, IRAs, UK pensions, Canadian RRSPs, and Australian super — with custodian scripts, document checklists, and country-specific tax worksheets.