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Participant divorces but does not take ex-spouse off of beneficiary de


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Participant in 401(k) plan is married and names spouse as death beneficiary. They divorce. Divorce decree does not mention retirement plans or employee benefit plans of any kind. Participant neglects to change beneficiary designation. Participant dies. Is there any argument that plan can pay death benefit to participant's brother instead of to ex-spouse?

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Guest PeterGulia

In deciding to approve or deny a claim submitted by any claimant, the plan administrator should administer the plan according to its provisions.

Unless the plan includes a provision that "undoes" a beneficiary designation following a divorce or other specified event, the plan administrator should give effect to the beneficiary designation.

This answer assumes an ERISA plan.

If the plan is not governed by ERISA, you should be careful to check state law. State statutes and court decisions vary considerably on whether divorce has any effect on a beneficiary designation.

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Guest GregSelf

See 'Hendon v. E.I. DuPont De Nemours & Co., 145 F.3d1331 (6th Cir. 1998) The court ruled that designations on the beneficiary forms controled, and the surviving (ex-) spouse was entitled to benefits under the plans as the deceased participant's beneficiary.

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Thanks to both respondents. I have requested the plan document.

I learned that it is becoming more common for plan documents to provide that spousal beneficiary designations are deemed revoked upon entry of a final divorce decree in an attempt to avoid this problem.

Also, apparently there's a split among the courts as to whether the plan administrator needs to request and review a divorce decree or can simply distribute in accordance with the beneficiary designation on file.

As the respondents implied, there's some uncertainty in this area and the "right" answer may depend on what jurisdiction's law is controlling.

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