Spousal Consent and Notary is a fraud

[TPA Bob]

Participant received a plan loan and provided the Plan Sponsor with the required documents including spousal consent which was notarized. Now appears that the consent and notarized was a fraud. Participant's spouse is now asking questions.

What should be done to protect the Plan Sponsor and what should they do regarding the made up paperwork?

Many thanks.

[DMcGovern]

Are you sure the notary was purposely committing a fraud? Notaries are legally bound to take proper steps to identify the person signing the document. Failure to do so can have significant impacts on the Notary, along with the party(ies) involved in the fraud. It would render the documents null and void.

[TPA Bob]

Are you sure the notary was purposely committing a fraud? Notaries are legally bound to take proper steps to identify the person signing the document. Failure to do so can have significant impacts on the Notary, along with the party(ies) involved in the fraud. It would render the documents null and void.

The client is assuming that the Participant has doctored this document as well.

[mbozek]

Participant received a plan loan and provided the Plan Sponsor with the required documents including spousal consent which was notarized. Now appears that the consent and notarized was a fraud. Participant's spouse is now asking questions.

What should be done to protect the Plan Sponsor and what should they do regarding the made up paperwork?

Many thanks.

What is the plan protecting itself against? Spouse was not a party to the loan. Plan did not know of fraudlent signature. Spouse's rights are derived from participant. If participant is paying off the loan I dont see any possible claim by spouse.

Loan is still valid since participant signed note and must continue payments.

According to the Senate Finance committee report on REA, if a plan administrator receives a notarized spousal consent valid on its face which the plan administrator has no reason to believe is invalid, the plan would certainly be allowed to rely on the consent, even if it is in fact, invalid.

These comments are limited to spousal consent Q only.