Beneficiary Designation

[Jilliandiz]

Participant elects the following as his beneficiaries:

Spouse 50%

Son 50%

Since the spouse is not 100% beneficiary, does the spouse have to sign off on naming someone else the beneficiary. Does the percentage have any affect on this ruling? Is there somewhere I can look that states this ruling?

Thanks

Jill

[ERISAnut]

The plan document will answer this question. It is really contingent upon whether the plan is subjected to the QJSA rules.

Always check the plan document FIRST.

[Guest Kevin1]

Jill: This area has always been a little more fuzzy that other areas and I don't think the document will provide the guidance needed. For example, is this a community property state and what effect does this have?

I see that Corbell is putting on a class on this- Estate Planning Considerations for Qualified Plans and IRAs. See you there!

[Guest zora]

Kevin1, this area is not at all fuzzy and has not been for many moons.

ERISANut, it doesn't matter whether the QJSA rules apply. If they do, then of course the plan needs spousal consent to waive the QJSA. But even if they don't, e.g., an individual account plan, the account must go to the P's spouse upon the P's death unless the spouse consents to another beneficiary.

This is true whether you are in a community property state or not.

But you are right about looking at the plan document first. I totally agree. For example, the plan may have the one-year marriage requirement and P and S may not have been married for one year.

Jill, bottom line, absent something like the one-year rule or where the spouse previously consented (properly) and such previous consent waived the right of the spouse to consent to future changes to the beneficiary, P's spouse must consent to another beneficiary, regardless of the percentage.

[ERISAnut]

All plans must be written in a manner to comply with 401(a)(11). If the plan is subject to QJSA, the the spousal waiver applies to only the portion representing the spouse of the participant (i.e. 50%). Regardless of what the rules are, the document must be written in a manner to conform with those rules.

Further, if the plan is a Profit Sharing Plan written to satisfy the exception to the QJSA, then the spouse must be 100% beneficiary under the terms of the plan. Hence, a spousal waiver will be necessary in order to designation any beneficary other than the spouse for any portion of the plan.

So, please explain to me again why the plan document or QJSA is irrelevent. Also, you cannot say, read the document but don't read the document. 99.9% of the cases will be resolved through a reasonable interpretation of the plan document. Exceptions are few, but do exist. This does not qualify as one of those exceptions. READ THE DOCUMENT!!!

[Guest zora]

I think you misunderstood me. I didn't say either the plan document or the QJSA is irrelevant. Perhaps I should have said that whether the QJSA rules apply is not the sole determining factor, and that there is still a concern even if the QJSA rules don't apply.

[ERISAnut]

Okay,

We are on the same page.

[Guest zora]

I do think it is worth expanding on something you said.

For the QPSA, the rules that require a spousal consent apply only to 50% of the benefit. If the plan pays a death benefit beyond the QPSA, then spousal consent is not needed in order for the participant to name someone other than the spouse as the beneficiary (though spousal consent is, of course, needed to waive the QPSA itself, and spousal consent would be needed, even for the portion of the death benefit that exceeds the QPSA, if the plan says it is needed). I frankly overlooked that.

Jill, maybe that is what is happening here? We can't know, because we don't know what the plan document says.

[ERISAnut]

Now, we are REALLY on the same page.

On his original post, he stated spouse 50% and non-spouse 50%. This sparked the QJSA comment.