MHW

If covered by ERISA, then it must be different from those commercial life insurances that are not covered. What are the differences? I have limited knowledge about ERISA and am only interested in the spousal/beneficiary rights.

@fmsinc Sorry about wasting your time. Your materials does not address the scenario involving a current beneficiary rights under ERISA. I disagree that ERISA beneficiary rights are limited to survivorship. The 401k is not a life insurance, which is not covered by ERISA. Thank you.

Correction above: wife 1 wants transfer the entire 401k to her...... NY or N.J. I have done extensive research on the situation where the 401k is created and accumulated during wife 2 marriage, and wife 1 wants to transfer the entire balance of the fund leaving nothing to the second family. I could not find any legal support. Even in the cases that the 401k is post divorce asset, which is not subject to equitable distribution but was ordered to pay alimony, none of them involves wife 2.

Correction above: wife 1 wants transfer the entire 401k to her......

Actually, the facts are the wife 1 never had a QDRO but a court order to prepare a QDRO. But the QDRO cannot be prepared because it would conflict with Divorce Decreer or the post judgement order. The post judgement order does not require husband to transfer the 401k but only “cash in” to pay the support. Now wife 2 wants transfer the entire balance to her by a QDRO, which has no been prepared for years because there simply is no basis for it.

I haven’t seen any case law directly on the point, appreciate if you can give me some cites on the issue.?

Thanks for the comments. For the argument sake, wife 2 also has obtained a QDRO to split the asset. But plan administrator refuse to approve. Nothing in ERISA says QDRO cannot be done while still married. Instead, it expressly says a spouse could have a QDRO. I don’t see any reason why she should give up her right. In addition, the property right came from marriage, not from QDRO, which merely a mechanism to split marital assets or pre-existing right to the property. Also, preparation of QDRO requires a basis. And one of the limitation is QDRO cannot ask for more than husband deserves. Thus, husband has no right to his wife’s property and ex cannot have more that what husband has. Therefore, protection of wife 2’s interest fully comply with ERISA. Further, if you argue wife 2 has no right to the 401k, then we are getting into the area of constitutional prroperty rights and equal protection. After all ERISA never says that wife 2 has only survivorship rights, but quite the opposite. mart

No one is arguing that Husband should take his share of the marital assets to pay for alimony. But should he be allowed to take her share as well? If so, ERISA law would become merely letters without any meaning, because there will be nothing left to the designated beneficiary if husband has right to empty the fund before he dies.

The purpose of ERISA is to protect spouse’s marital property interest. It doesn’t allow change of beneficiary. It also allows a “spouse”, not a”former spouse” to transfer her share of interest without divorce. This is consistent with all state domestic relations laws, in fact, ERISA expressly says these rules are pursuant to state domestic relations law. Preemption occurs only if there is conflict. There cannot be preemption if there is no conflict. The 401k is wife #2’s marital assets. Allowing ex wife to take it as if the ex wife replaces wife #2 makes no sense. No one can remarry if wife #2’ marital assets are always subject to ex wife to grab and get a windfall after divorce. the Supreme Court also ruled that beneficiary’s interest cannot be changed. Otherwise, ERISA defeats its purpose to protect spousal rights.

Thank you for the answer. Wife #2 is the beneficiary. Shouldn’t she have equitable interest in the 401k? He owes but She doesnt owe alimony to wife# 1. Can her equitable interest in the 401k be ignored? How can her interest be protected? This 401k is clearly the community property for wife #2. It seems unfair to take wife #2’s property to pay ex wife.

Thank you for the answer. Wife #2 is the beneficiary. Shouldn’t she have equitable interest in the 401k? He owes but She doesnt owe alimony to wife# 1. Can her equitable interest in the 401k be ignored? How can her interest be protected?

Facts: Divorce was final 20 years ago. ALL marital assets including all retirement funds were properly divided at the time of divorce, and wife waived all rights to all post-divorce properties in Divorce Decree. Husband remarried 17 years ago, and established a new 401K account (and ERISA fund) with a new employer 5 years ago. The new wife is the designated and statutory beneficiary to the 401K. ERISA does not allow husband to change beneficiary without the new wife's written consent. Ex-wife now is suing husband for alimony owed to her and the court awarded her the entire balance of the new 401K. Ex-wife claims that she is the "former spouse" under the QDRO exception and is entitled to the entire balance of the new 401K, although the new 401K is a post-divorce asset and the new wife is the beneficiary. The new wife objects on the basis that this 401K is her marital asset and the Ex-wife has no right to take it. Is Ex-wife a "former spouse" to this 401K or simply a "creditor". What the "former spouse" mean in ERISA?