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If there is a valid Qualified Domestic Relations Order (which is not the same thing as a divorce decree) the second marriage would not void that provision.

We did this recently where we used the RMD forms from our system. After being generated, we changed some of the words as necessary - like "Reason for Distribution" from "RMD" to "Death Benefit" and where it requests the participant SSN, we changed it to "Trust EIN". This way we got a form to get the needed information and signatures, but didn't have rollover and mandatory withholding options.

I think you're right, his (new) wife would have to be the beneficiary of all plan benefits. But that doesn't mean the language in the divorce decree can be completely ignored as an "oops, never mind." It may not be enforceable but I'd assume there is some breach of contract violation if he does anything that invalidates that clause; I'm not a lawyer and I don't know for sure. But you and he had better make sure his attorney understands these interactions 100% or gets someone who does know. I see nothing but red flags waving - second to die insurance with some wifty provision that the first spouse gets the policy at his death, raw land in the plan. Oy.

I believe you also have to have no minor children with your husband, in addition to what Mike listed above. If the child is deemed to own both the businesses through the family attribution rules, then that also removes the potential exemption to the usual controlled group rules, as well.

The non-spouse form sounds like a winner, no?

Plans, whether they be 401(k)'s or SEP's, for restaurants are fraught with administrative issues and very, very, very difficult to get right. In a perfect world you would be able to prove whoever told you that your employees would need to be covered under a plan for your husband is wrong. Then, at the least, he could set up a plan for himself and leave the restaurant out of it. But they are probably right, because you have to satisfy quite a few requirements to be able to scissor the two businesses and, most likely you will fail one or more. Briefly: 1) You don't live in a community property state 2) He doesn't help at the restaurant (either as an employee or otherwise) and you don't help him in his business (either as an employee or otherwise) 3) His business doesn't generate more than 1/2 of it's gross revenues from passive investments (this one is not generally a concern) 4) Your husband is free to sell his business to an unrelated person without your approval or the approval of a third party acting on behalf of a minor child. It's a longshot, but if you do satisfy all those rules then the advice you have been given is wrong and, by far, the easiest thing for him to do would be to establish a 401(k) for himself and forget about the restaurant. If the advice is correct then the best thing to do, as already indicated by spiritrider is to gather up all the information you have and get a pension professional to look at it for you. What you want is to list, by calendar year, every employee with date of birth, date of hire, hours worked during the year and compensation paid to them during the year. You need to do this for EVERYBODY, no matter how few hours they work in any given year. You need to do this for at least five years prior to the first year you want to establish a plan for. If you are thinking about 2016 (for a SEP, assuming your 2016 personal tax return is still on extension) that means from 2011 through 2016. If you are thinking about 2017 (which would be required for a 401(k), but could also apply to a SEP) that means from 2012 through 2017. Then you need to provide copies of both you and your husband's IRS Forms 1040-Schedule SE for all years in question. To the extent you are including 2017 in your deliberations you have to guess at some of this information, but guess you must, because nobody is better positioned to do so than you are. A word of caution: many restaurant owners chafe at properly reporting compensation for those employees who receive tips. The rules are complex. Before you involve a pension professional you need to check with a CPA to ensure that you understand how to accurately report compensation for those employees who receive tips. If you can put all that information together a pension professional should be able to tell you what your options are with very little effort. And if somebody says they can give you thorough advice without seeing all of the information I've mentioned, ask for a reason that the information isn't necessary. Good luck.