Spouse MIA can she name a different beneficiary?

[Guest EricWings]

Participant's husband has disappeared to South America and she has been unable to serve him with divorce papers. Can she and how would she name a nonspouse beneficary to her 401(k) plan?

[Jean]

Only a US court can grant her a divorce -- not sure of name/process for that when a spouse abandons another. She needs to get a court order saying she is or isn't married. Until she is divorced, then spouse remains primary beneficiary.

[Peter Gulia]

Some (not all) plans permit a qualified election without a spouse's consent if "it is established to the [plan administrator's] satisfaction ... that the [spouse's] consent ... [can't] be obtained ... because the spouse cannot be located[.]" ERISA 205©(2)(B).

Although ERISA doesn't expressly require a court order as a condition of this exception, a careful plan administrator would not rely a participant's statement that his or her spouse can't be located, and instead would want clear and reliable independent evidence. In the absence of a divorce (or a court order of abandonment), a plan administrator that performs to ERISA's prudent-expert standard of care might insist on a Federal court order. (The testimony of an expert investigator explaining how he or she was unable to locate a person might support a court's finding.) Alternatively, a participant might find that it's easier to get a State court's order of divorce or abandonment.

[GMK]

An excellent reminder to plan administrators, Peter, regarding careful, prudent handling of this kind of case.

And easy to administer, too, unless the participant dies with an AWOL spouse.