capitalqdro

My point is that gifting is short sighted because a deceased former spouse would not be able to continue gifting payments. Those payments would stop upon death because QJSA's are reversionary if the participant outlives the alternate payee. It is immaterial whether the plan approves of such gifting. Therefore, a QDRO is the best course of action.

Since the participant is in pay status, it is very unlikely that all benefits, particularly survivor benefits, could go to the kids. With that said, one route would be to have the spouse sign a qualified waiver. No QDRO is required to eliminate an interest. She could not designate a beneficiary via such a waiver since it violates the qualified waiver rules, but a new QDRO could be drafted under a shared approach so that the kids would get payments so long as the participant is alive. If the kids are minors, an irrevocable trust could be created as a recipient for the benefit of the kids. I would be reluctant to simply gift the payments to the kids since there are gift tax implications depending on how much money is gifted. Also, supposing the spouse predeceases the participant, another payment scheme would have to be created anyway to ensure the kids continue to be paid.

You can seek to have the QDRO vacated and benefit payments revert back to the participant. As said above, changes are prospective only. Refunds would have to come straight from the alternate payee.