Survivor Benefits Claimed by Two Wives

[Guest jac]

We've got a DB plan with a deceased participant who was in pay status at the time of his death. A QJSA is payable, and the participant's benefit application named his wife ("second wife") the beneficiary of the QJSA (and, of course, his benefit was calculated using his and his wife's ages).

Participant dies. Another woman ("first wife") reports his death and claims to be his wife. She provides a marriage certificate and the death certificate on which she is named as the surviving spouse. She acknowledges that she and the participant were not living together, but claims they were never divorced. She asserts that the marriage to the second wife is not legal.

Plan contacts second wife for proof of marriage and divorce decree of participant and first wife. Second wifes fails to reply to multiple letters.

First wife wants the QJSA.

The participant lived in IL. First marriage took place in IL.

Thoughts on how to evaluate claims and on proper beneficiary? Should the Plan simply file an interpleader?

Thanks.

[QDROphile]

Is the plan fiduciary an ignorant wimp, an intrepid soul or something in between?

[Guest jac]

QDROphile,

Don't have a response to your question! Hoping you, and others, could shed some light on the issues. Thanks.

[Guest jac]

Well, after a little more thought, QDROphile, I would say "something in between."

[Guest AnnieP]

You need to get an attorney involved who can determine the "legal" spouse.

[Jed Macy]

I had a similar factual situation with a sister and a wife. The sister claimed that the "wife" was merely a girl friend and that no marriage took place. Since the wife could not produce a marriage certificate (nor even a joint tax return), I had the plan administrator deny both claims and sent them to court. The result was that the judge issued an order to the effect that the alleged girl friend was in fact a wife. Then the plan paid her the death benefits. Note that the plan was not a party to the court action.

In short, you could send both wives to state court for an order as to which one was his wife when he died.

[Mike Preston]

I would presume that if an intrepid soul the fiduciary would make their own decision. Based on the facts as presented, the second "wife" is out of luck. Does the fiduciary feel strongly that the facts are as presented? If not, then maybe the fiduciary can qualify, in part, as that wimp. An interpleader sure does seem like the right ticket in that case.

If somewhere in between, maybe getting plan counsel involved to determine whether the facts are as presented would make sense; or, if they can't, then follow through on the interpleader as an alternative.

By the way, has the plan made payments to the second wife which would be invalidated by a determination that the second marriage was illegal? That would be a much more involved situation and in that case I would think an attorney needs to be involved as soon as possible.

[QDROphile]

I subscribe to Mike Preston's answer. I tend to like intrepid fiduciaries. The fiduciary should start the process through the claims procedure. If the facts turn out to be easy (e.g. the second "wife" is not forthcoming), then the decision is easy. The fiduciary will have the opportunity to gage what additional assistance and procedures are necessary as the facts are developed.

I don't think that the fiduciary has to make an immediate determination of legality of any marriage. If it comes to that because of disputed facts or documents, I doubt that the fiduciary should make the determination at all. The matter will end up in court. I agree that somewhere in between the fiduciary may need legal counsel.

The second issue, possible mispayment, can only be decided after the first. I like to jump to conclusions, so my first thought is that the fiduciary will need advice about collectibility if the fiduciary were to try to recover payments that were induced by fraud. The fiduciary has to be prudent. Prudence dictates that good money not be thrown after bad.

[mbozek]

The plan administrator should tell the parties that either they settle the dispute between themselves and provide the plan with the necessary release and waiver of liability signed by each party or the plan administrator will commence an interpleader action to determine who is the beneficiary. Since an interpleader action costs money the plan admin could tell the parties that no benefits will be paid unless they settle which may force one of them to commence an action for payment. Under no circumstance should the PA make a decision as to who is the legal spouse becaue the loser could always sue the plan for benefits.

[david rigby]

This is fun. When this is resolved, please post the facts.

Related, before going back to "actuary-ing", I spent a few years administering plans on the corporate side. (Large plan.) We had a policy of requesting copies of birth certificates in all cases and marriage certificates whenever the spouse might be in line for a benefit. It seemed like busy work, but had some value.

[mal]

As a "wimp" who would rather be safe than sorry,

I believe the answer is to file an interpleader

action and let the court sort out this mess. I have

used the settlement agreement approach discussed

above, but believe the interpleader is the easiest

and most cost efficient way to protect your plan. In

fact, I recall there were some cases that made me

question whether a settlement agreement could

overcome the bright-line "plan documents" rule used

in many of the Circuits. (My recollection is that the

agreement would need to contain all the elements

of a QDRO and be very clear as to the benefits

being waived.)