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Belgarath, What would normally happen in a situation like this is that the Board would terminate the ESOP, resulting in 100% vesting for all participants. The ESOP stock would be re-appraised at the end of this year, at which point the accounts would be re-valued to reflect the near-worthlessness of the ESOP stock. You would then proceed to make distributions as called for in the plan document and/or distribution policy. You may even amend the plan document or distribution policy to accelarate the timing of distributions in connection with the liquidation of the Plan. If there are participants that are due a distribution this year and you know their accounts are significantly overvalued, most plans contain a provision whereby the trustee or committee can declare an interim valuation date so that you could re-value the plan prior to paying out the current batch of distributions. This introduces added expense for an additional appraisal, but you could potentially distribute all of the ESOP's stock after obtaining that interim valuation and thereby eliminate the need for a year-end valuation. Does this get at the core of your question? Marcus

The plan will say, and not all plans require a year before giving the new spouse rights by default.

See 1.415©-2(g). Or course, the plan has to provide for it.