stephen Posted June 30, 2004 Posted June 30, 2004 Participant with ESOP, 401(k), and IRS accounts. Deceased former spouse is named as the beneficary with children as contingent beneficiaries. 3 years ago the participant remarried a non-resident alien. The participant hinks that the children are protected as beneficaries as the former spouse is not eligible for the distribution the benefits of each go to the contingent beneficiaries. I think the participant needs to get the spouse to sign a consent form for the children to be named beneficaires. Please advise.
david rigby Posted June 30, 2004 Posted June 30, 2004 ...as the former spouse is not eligible for the distribution... What is the logic that comes to this conclusion? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
mbozek Posted June 30, 2004 Posted June 30, 2004 Under ERISA the non resident alien spouse is automatically the beneficiary of the death benefits under the ESOP or 401(k) plan unless the spouse waives the benefits. Reg. 1.401(a)-20 Q/A-3. The children of the former marriage are at best contingent beneficaries. For non ERISA plans such as an IRA the death beneficary is determined by state law. In some states such as WA and CA the former spouse is automatically removed as IRA beneficiary upon divorce. In other states the bene designated the date of death receives the IRA benefits unless a divorce decree provides otherwise. mjb
stephen Posted July 1, 2004 Author Posted July 1, 2004 PAX: FundeK is correct the former spouse is deceased thus is not an eligble beneficiary. mbozek Posted on Jun 30 2004, 12:35 PM Under ERISA the non resident alien spouse is automatically the beneficiary of the death benefits under the ESOP or 401(k) plan unless the spouse waives the benefits. Reg. 1.401(a)-20 Q/A-3. The children of the former marriage are at best contingent beneficaries. Thus, if the participant wants the kids to be the beneficary he needs to get his spouse to sign the consent form. He does not want the current spouse to be the beneficary due to tax issues. mbozek Posted on Jun 30 2004, 12:35 PM For non ERISA plans such as an IRA the death beneficary is determined by state law. In some states such as WA and CA the former spouse is automatically removed as IRA beneficiary upon divorce. In other states the bene designated the date of death receives the IRA benefits unless a divorce decree provides otherwise. mbozek: Do you happen to know the law for Montana regarding the IRA beneficiaries?
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