<p>I was on another forum where one of the members tragically lost his wife last year and is taking care of his 2 young daughters. The guy is now trying to decide what to do with his wife’s 401K. His financial “advisor” actually advised him to take the money out of the 401K, pay full taxes (isn’t there a 10% penalty as well??) and set up investment accounts for his daughters. Knowing what I know now, I told him having money in his daughters names would hurt their chances for getting financial aid down the road as they would be expected to contribute a higher percentage of their own money towards college expenses. I told him to keep the money in his name, roll it into his own 401K, and most certainly find a new financial advisor!</p>