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How do I tell my stepmother that I was the beneficiary of my deceased dad’s retirement account?

My dad died a few months ago. He killed himself and didn’t have a will.

For context, I’m 23m, and my stepmom is in her late 40’s.

He divorced my mom back in 2019 and got remarried a few months later. However, when he got divorced, he signed me over as the beneficiary of his retirement account, which I didn’t even know about until I received a letter saying that I was the beneficiary a few weeks ago. I cashed out and got $25k, which I am using as a down payment to build a house.

I didn’t tell anyone except for my wife and mom, both of whom I trust with my life. I have a pretty big family (4 brothers and 1 sister + 5 step-siblings), so I figured it would be best to spare people’s feelings because I was the only one who directly inherited anything from my dad. However, my step-mom must have assumed that my mom was still the one on the account because she just texted my mom and asked if she would sign the account over to her.

I have a pretty good relationship with my stepmom, but I’m also not going to give her any of the money either. How can I kindly tell her that she was not the legal inheritor of his retirement account?

tldr; My stepmom is wondering where my dad’s retirement account went, which i inherited.

Edit: I’m deleting all my edited comments and giving you guys an update on what happened. I’m only leaving it up until tomorrow though, because this post got quite a bit of attention. I talked to my stepmom about it. It was good because she was in the process of trying to locate the account with her attorneys. The divorce decree left some confusion about the retirement account, but since I was the beneficiary and not my mom, it trumped the divorce decree. My stepmom was very gracious, though understandably upset about it. She talked about how much she hates her ex for the legal battles he put her though. Then after I left she texted me if I reinvest the money within 30 days to a Roth ira I won’t have to pay taxes. So it was a very good thing that I talked to her about it and it all went very well.

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  1. Tell your Mom to tell your Stepmother that she doesn’t know anything about it, and hasn’t had access to your Father’s financial info since the divorce. End of story.

  2. How do you think she will handle it?

    If you think she’ll be disappointed but understanding, I would just call her and tell her what’s up. “Hey, I were checking with my mom about Dad’s retirement account. He actually has me as the beneficiary on it and it has been used for the down payment for the house I’m building.”

    If you think it will be a nightmare, and if your mom is OK with it, then I would have your mom nicely tell her that she doesn’t know anything about it but that she is certain she was not the beneficiary, and to let her know if she can help.

    Edit: out of curiosity, are your siblings also his children? If so, do you think he set you as the bene because he wanted only you to receive the money, or do you think he would have intended it to be divided between his children and widow? You have no legal obligation to share but you might have a moral one.

  3. oof, this is kinda a tough one. Money gets messy, and people get weird over it, sometimes crazy. I would just say, “The beneficiary of the account was already paid, please don’t inquire any more into the matter”. I’m worried if you say who it was, or wasn’t, by process of elimination they whole family will figure it out and get involved. good luck man, and condolences on loosing your father.

  4. I’d just let your mom tell her she doesn’t have the retirement account. But also she’s pretty entitled to think that had his retirement account been left to your mom then she would transfer it over to her after your moms recent divorce and her recent marriage. Sorry for your loss. Also if you don’t care how the relationship with your step mother Carries on you could just tell her it was left to you and you used it.

  5. Do your siblings know? Where there any expectations of you sharing or splitting that money?

    The fact that you are being so secretive about seems a little…gray. People in the comments talking about people act funny around money…but you are the one acting funny about it imo.

  6. Just rip the bandaid off and tell her. Honestly I think it’s more cruel to leave her wondering what happened to the money and curious if she was getting any. Just informer her view phone call or text message. “Hey, I heard you were wondering about the retirement account. The $$ went to me and I am using it towards a house.”

    She did love your dad and to that end I’d respect her enough not to ghost her and leave her in the dark about this.

  7. You tell her…? It was you father’s choice and sounds like he had some issues and things happened which you may not know about. Nothing wrong with keeping the money but there is more to the story here.

  8. “I understand that you believe that mom inherited dad’s retirement account. That is not the case. I was named the beneficiary of the account. I’ve already closed the account and allocated those funds towards something so there is no account to sign over to you.”

  9. I would just tell her the truth so she doesn’t think your mom is not being truthful. Honestly they weren’t married that long so it’s weird she just expects it to go to her when she knows he had kids. I think your dad wanted you and you alone to have that money but be prepared for your siblings to be angry when they find out

  10. Telling your mom to keep the secret is just unfair to her.

    And hiding this from your step-mom will just make it a big deal later. After all, why would you hide it if it was all on the up and up?

    So just tell her Dad made you the beneficiary on his 401k and end the conversation there. You don’t know why he never updated it to her, you don’t know he even planned on doing so. And unless she’s got a Ouija board laying around no one else knows enough to challenge it.

  11. Well, one thing is for certain… you’ll find out exactly how good your relationship with your step-mom is when you tell her. Money does crazy things to people and relationships.

    Not having a will means probate and everyone is going after his estate. As his son he wanted you to be the beneficiary of his retirement account.mSo, don’t feel guilty for honoring his wishes. That’s how I’d communicate it to your step-mom. Tell her you had no idea until you received correspondence regarding it and everyone should honor his wishes.

    As far as what you want to do about probate and his remaining estate… that’s up to you. What I’d probably do is propose to split it equally between you, your father’s other blood children (not step-children) and your step-mom.

  12. My father left me as the beneficiary as he didn’t speak to my four siblings for years. I immediately said that I planned on splitting the 10k between all of us. I was very upset on losing my father to where I couldn’t even attend his funeral services. Before he was even buried the woman who raised me called saying all the kids were entitled to some of that money, I must share & I needed to hurry up & get it asap. That money didn’t mean anything to me even though I’m super poor, I just missed my dad. It started problems within the family as all they cared about was the money. They demeaned & emotionally abused me over it. That was twelve years ago & I’ve never spoken to anyone in the entire family since. Ran into them about seven years later & though they seemed happy to pretend like it never happened, I turned & walked away. I never accepted the money & never intend to. Money will definitely change the dynamics in your family once they find out that you were the sole beneficiary & didn’t share it with them. I never told anyone I was the beneficiary but they somehow found out? They also immediately wanted me to sign for his bank account as all his children would have needed to be in agreement or something but I assume they never got that without me. They didn’t care for him while he was alive but all of a sudden he’s gone & they all seem to care about what he owned. Disgusting behavior that I will never forgive.

  13. She will find out. Is it better for you to tell her or for her to find out from someone else? You have already told 2 people, so despite your trust in them these things do have a way of making it out there. Not only that but you now suddenly have enough money to buy a house. It’s not really gonna take people too long to figure out who the money went to.

    I think you should just tell her, and get it out of the way.

  14. I think this is pretty common and you are about to see your step moms true colors. Regardless of what she says to you, possibly that he told her it was hers, do not bend. There are at least 5 other people that would have claim to this before her. Do not feel bad, just respect the signed forms that have you as the line recipient.

  15. I don’t think you should feel bad about it if you do. You stated that out of you and your siblings, you’re the only one that tried to repair your relationship with him. While it may not have been a perfect repair to you, it must’ve meant a lot to him hence why he left you the money.

    With your stepmother, you should either be honest or keep giving her the runaround (having your mother simply state that she has no clue). Either way, get a lawyer. But, morally I think you should just accept your luck and the fact that your dad appreciated you rekindling your relationship with him. Good luck!

  16. Let stepmom have her attorney send docs to your mom. The attorney will have to identify that account very specifically, and if his client is not entitled to it, he will have a lot of trouble getting the info from the bank (etc) that held the account.

    Stepmom is just trying to bully mom into giving her more money. Mom can tell her whatever she wants, but I would suggest “take a hike”.

    Edit: I’m having trouble making myself make sense – I’m trying to say that if she has a e entitlement to that account, she wouldn’t need anyone to sign it over to her. She at least should know that – so she is just hoping mom doesn’t know, or is just so generous she will give it to stepmom out of the goodness of her heart.

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