Benefit Payment to Participant's Spouse

[Guest ckolodziej]

This is a weird one but let me know if anyone has had a similar situation.

I have a participant who had a stroke and is mentally incapacitated - to what extent I am unsure. He is living in a nursing home and his spouse wants his money from the Plan to pay the nursing home. Here are the facts:

1. There is no beneficiary form on record.

2. This spouse is spouse number 2.

3. Apparently they were married after the stroke - somehow. How this is possible if he is "brain dead" as it was described to me by the client -I do not know.

4. He has a former spouse and children by his first marriage who think they might be entitled to the money.

5. The current spouse does not have Power of Attorney and does not want to obtain POA.

The participant has obviously been terminated and is eligible for a distribution. What happens if he is unable to request the payment himself and what rights does the current spouse have?

Isn't there some rule about having to be married at least a year to be a legal beneficiary (assuming no form so it automatically goes to the surviving spouse not withstanding anything to the contrary)?

Who should this money be paid to and how do they go about getting the ball rolling?

Any advice would be greatly appreciated.

Thanks.

[david rigby]

Again, what does the plan say?

The plan can define "eligible spouse" by placing a minimum on the period of marriage. The longest the plan can use for this definition is 12-months, but look to the plan definition first.

You state "The participant has obviously been terminated and is eligible for a distribution." That is not so obvious to me. What does the plan say about termination of employment?

If no POA, it seems unlikely that the plan could make any distribution based on the spouse's statements. You might also want some proof that this really is a spouse. If the marriage certificate is dated after the stroke, caution might be in order.

If there is an ex-spouse, be sure to check your files to make sure there is no QDRO. It's easy to overlook.

[mbozek]

Ask the spouse for a marriage certificate and power of attorney. Then Have your counsel review the documents.

[Mike Preston]

Does a power of attorney make the grade? Wouldn't the court need to issue an order giving someone the right of conservatorship? Or is that what you meant by having the documents reviewed by counsel?

[mbozek]

Some states ( NY) allow a person to assign the right to direct benefit payments under a POA. If there is no POA then a conservator or guardian would have to be appointed.

[Mike Preston]

Do you know if California allows a POA?

[mbozek]

Sorry I dont- but any cal lawyer should be able to tell if it is allowed.