Larry Starr

I can't believe no one has latched on to the real problem here. More than likely, he was NOT an independent contractor, but a misclassified employee of his father's practice. I'm willing to bet that an analysis of his "practice" will show he was an employee of his father's practice. I had dental clients years ago who had dentists treated as "independent contractors". I told them that they were at risk, but they continue to treat them as ICs. That is, until they were caught and the 2 partners had to pony up over $100k EACH for all the penalties associated with misclassifying employees. Ever since Microsoft got caught with the same problem, most plan documents have language that says if an employee who was thought NOT to be an employee is found to be an actual employee, they are still not eligible for the plan. Of course, this means the plan now has to pass non-discrimination while counting those individuals as employees. It may not be a problem if they would have been paid enough to be HCEs, but if they only made $100k a year, then they are going to count against all the tests because they are NHCEs getting zero. Anyway, I think he's taking a big risk in not just crediting time with his father's firm for everyone; I probably would not handle the case if he didn't agree to do that. Larry.

Boy, I remember dealing with this issue YEARS ago on the FIRST pension industry bulletin board system (I was one of the sysops; it was called PIX if anyone still remembers!). As I remember, we resolved that no one should bother paying the tax because of the penalty. The penalty is that the State of Florida will not enforce the loan; BFD! (big flying deal!). When has any ERISA plan loan had to be enforced in state court? Do you know of any ever? I think not. Why, because the loan is 100% collateralized by the participant's account, which is used to offset the loan upon default. "We don't need no steenking state court" (paraphrase of Alfonso Bedoya from The Treasure of the Sierra Madre). I think this issue is equivalent to "how many angels can dance on the head of a pin"; the answer is "who cares"!!!!! Larry.

Almost definitely, the plan language made the spouse the beneficiary upon marriage. Of course, the plan document needs to be reviewed, but based on your comments, I'd bet that's what it does. If the spouse has NOT waived her rights under this plan, then she is the beneficiary REGARDLESS of what a beneficiary designation says. It would be the same as if he filled out a new beneficiary designation listing the mother without the spouse's written consent. While Peter's commentary is certainly correct, I'm not sure you have to look outside the plan document which appears to say the spouse is the beneficiary unless she waives her rights. No waiver; no mother! Larry.

Just considered it; no, it does not constitute a claim.