Beneficiary Designation Excludes New Spouse

[billfgrady]

Participant is unmarried and fills out a beneficiary designation naming his sister as the beneficiary of his qualified plan account. Participant subsequently marries, doesn't change the beneficiary designation and then dies shortly thereafter. Assuming that the qualified plan is subject to the annuity rules, was wife required to consent to the designation of the sister upon marriage or is wife out of luck because the designation was completed prior to her marriage to participant? I don't see anything in 1.401(a)-20 addressing these facts. What if the plan isn't subject to the annuity rules?

[billfgrady]

Treas. Reg. 1.401(a)-20, Q&A 27 is clear that no consent is necessary if there is no spouse. Does this cover it?

[Guest mjb]

I thought the rule is that death benefits are paid to spouse on date of death regardless of who was previously designated as the beneficiary before the P was married unless spouse waived rights to benefits because death benfits must be paid to spouse. Same rules apply if plan is not subject to annuity rules plus rule that plan can require that participant be married for 1 year prior to death. Waht does plan say about payment to spouse?

[Belgarath]

I agree with MJB. Given that the plan is subject to QJSA/QPSA rules as you have stated, then it is a plan qualification requirement. See IRC 401(a)(11), 417, and ERISA 205. The plan may not even use the one year rule, (many don't) in which case, as soon as he gets married, the previous beneficiary designation becomes invalid, and would have to be executed again with spousal consent to be valid.

[billfgrady]

Thank you both.