9th Circuit Affirms Secondary Beneficiary Tax Liability

In D.N. v. United States, the Ninth Circuit Court of Appeals affirmed a district court decision finding the secondary beneficiary of the decedent's 401(k) account was liable for taxes on the account.  The beneficiary was the minor son of the decedent and inherited the funds.  The court rejected the argument that the primary beneficiary was liable for the taxes.  The decedent was killed by his wife, the primary beneficiary, which made her ineligible to inherit the funds.

Posted by James G. Haskell, Senior Associate Editor, Wealth Strategies Journal.