Beneficiary Designation

[austin3515]

Owner (aka SpouseB) and SpouseA both work for a medical practice. SpouseA wants to name kids as beneficiaries and therefore Owner (SpouseB) must consent. Can Owner witness his own consent on behalf of plan administrator? Or is it foolish not to just get it notarized?

[Bird]

In your situation, it would be ok for the Owner to witness SpouseA's consent, as plan representative, if they were doing something similar.

I don't think Owner can witness his/her own signature, so...no.

[Peter Gulia]

It might be imprudent for SpouseB to act as the plan's "representative" (that's the lingo from ERISA section 205 and the tax-Code counterpart) for a situation in which SpouseB is an actor. One imagines that a prudent fiduciary would use care to protect the plan administrator's decision from a challenge that it was affected by an interest other than the plan's interests, and from a challenge that the consent might not conform to the plan's conditions.

While one guesses that SpouseA is not your client, he or she too might be better protected by a spouse's consent that is independently witnessed. Even if SpouseB now is willing to sign the consent, what happens if he later asserts that the consent is invalid?

[austin3515]

_{Even if SpouseB now is willing to sign the consent, what happens if he later asserts that the consent is invalid?}

_{The Plan administrator is the spouse waiving the benefit, so would it not be unlikely that he would accuse himself of not taking due care?}

[Peter Gulia]

It happens. A person might deny that a signature is his. Or even without denying a signature, a person might argue about the validity of an act, or about the legal effect of an act. And yes, I have seen situations in which an individual argued the invalidity of his own acts.

I have seen situations in which a person signed a consent or agreement that he knew to be invalid because he intended to influence someone who mistakenly believed that the consent had legal effect.

I have evaluated thousands of beneficiary disputes. I no longer have to imagine the positions and arguments that people put forward.

Even if one is fully confident that the situation of A, B, the children, and the employer today is entirely harmonious, how does one know what circumstances will be in play after the participant's death?

All that observed, whether to recognize a qualified election as supported by the spouse's consent is a plan-administration decision that the plan's administrator will make.