Spousal rights

[Guest BobParks]

When a 401(k) Plan participant terminates employment and subsequently requests to roll over his/her 401(k) Plan vested balance to an Individual Retirement Account (IRA), what are the requirements related to spousal consent prior to the roll over being executed? At the time of the request to roll over the account balance, the former participant has legally separated from her spouse but the divorce has not yet been finalized.

Also, with respect to opening the IRA account, does the account beneficiary have to continue to be the spouse?

If you can provide cites I'm sure one or the other party will demand them.

Thanks

[QDROphile]

Plan terms will cover spouse consent. Usually no consent is required for distributions form 401(k) plans. There are no rules that require any particular outcomes for the circumstances you describe. There is no rerquirement for carry over of beneficiary designation to an IRA. Plans are required to take certain actions upon receipt of a domestic relations order and they may decide to take certain actions with less formal notice of an anticipated order. You are not going to find cites to prove a negative.

[david rigby]

Somewhere in the original question is the unspoken thought of "QDRO". QDROs apply to qualifed plans, not IRAs.

[Guest mjb]

There really isnt an issue here since the participant will be required to list the 401k asset on his financial disclosure as a marital asset to be divided by the court. If the court orders part of the account to be distributed to the spouse, the participant can transfer $ from his IRA to the ex spouse's IRA on a non tax basis under IRC 408(d)(6). Spousal consent is required in a 401k plan only if the plan requires it because benefits are provided as an annuity.