Monies in 401K will be transferred to the designated beneficiaries.
If you have not designated a beneficiary (person or people), it is recommended to update your personal file to add beneficiary information.
First, you will designate the primary beneficiary (your wife or a surviving parent).
Second, you will designate the contingent beneficiary (your children or anyone you like to give money to).
You can allocate your monies to each beneficiaries by %.
As long as the deceased person’s wealth is less than the exempt amount set up by IRS, the deceased does not pay any taxes. However, person who receives inheritance from the deceased 401K or IRA account may pay taxes on earnings or withdrawals.
