Okay to make distribution from a 401(k) to son?

[katieinny]

The beneficiary form was completed indicating that the participant was not married. He named his son as beneficiary. After the participant's death, information surfaced that would indicate that the participant was still married, but probably estranged from his wife. She did sign a waiver after the participant's death. Her signature was not notarized. Something like 6 years have gone by since the participant's death. At some point during these intervening years, the spouse returned to her native country. After all this time, the ER would like to distribute the assets to the son. I'm hoping that there is an exception to the spousal beneficiary rule in cases like this. Any thoughts or guidance you can offer?

[Bird]

What is "right" may depend on the waiver, and exactly what she was waiving.

It sounds like the original beneficiary form was invalid, so act as if it doesn't exist. If the wife actually disclaimed benefits, then they go to the next in line according to the terms of the plan, which is likely the son but needs to be reviewed.

But I'm not a lawyer and this is a case that probably needs one...

[mbozek]

Why is this question being raised 6 years after participants death? Has son filed a claim for benefits?

[katieinny]

I think (just guessing) that the employer was probably concerned about paying the benefit to the wrong person, so they have been hesitant to distribute. I heard that the son did consult with an attorney, but not sure if it went beyond that.

[mbozek]

Under IRS reg. 1.401(a)-20 Q/A-27 a spousal waiver is not required if it is established to the satisfaction of a plan representative that there is no spouse or the spouse cannot be located. The waiver of spousal consent requirements for a 401k plan are similar to the requirements to waving a QPSA.See Q/a-32.

[GBurns]

I suggest that you consider using a lawyer on this one.

mbozek referenced a spousal waiver, but I do not see that his cite is applicable:

Q-27: Are there circumstances when spousal consent to a participant's election to waive the QJSA or the QPSA is not required?
A-27: Yes. If it is established to the satisfaction of a plan representative that there is no spouse or that the spouse cannot be located, .... "

You said that "information surfaced that would indicate that the participant was still married, but probably estranged from his wife." which could go either way if you need to establish whether or not you should, by reasonable standards, know that there was a spouse. But, you also said that she signed a spousal waiver after the death. So in reference to mbozek's point, there is a known spouse and you already do have a spousal waiver, even though it might be inapplicable. You also should be able to locate her through the US Embassy of the country to which she has returned.

I do not understand why a spousal waiver signed after the death of the participant would be valid. I thought that a waiver had to be executed prospectively. As Bird asked What is she waiving? She could not be waiving consent to the participant's election of a QJSA or a QPSA because the participant is already dead and benefits are now payable or should have already been paid. So what did she waive and did she know what she was signing, if in fact, she really did sign some sort of waiver. I have some suspicions about her signing a document that is not notarized and which might not be applicable. Did she get this "waiver" and any instructions from you or the plan administrator? Is she aware that the benefits normally should have been paid to her long ago?

Why was the distribution not done years ago or escheated to the State ?