A court case from 2012 titled, Herring v. Campbell, Administrator of Marathon Oil Company Thrift Plan, U.S. Court of Appeals for the Fifth Circuit, 8/17/12, further confirms the importance of making sure a beneficiary election form has been completed and kept up to date when opening a qualified plan such as a solo 401k. In addition to electing a primary beneficiary, as this court case demonstrates, it is just as important to name a contingent beneficiary.
In the above court case, the qualified plan participant named his wife as the beneficiary, who later passed away, but did not name a contingent beneficiary. As a result, instead of his step children receiving the $300,000 payout, his six siblings received the money.
In sum, this court case highlights the importance of making sure solo 401k plan beneficiary designation forms are kept up to date by reviewing them periodically.
