Prenup

[Monica Barnard]

Participant is married to wife A for 15 years, divorces and marries wife B. Wife B signs prenup that all assets up to marriage will go to other beneficiaries upon Participant's death. Participant and Wife B married for 20+ year. Participant dies. Is Wife B the beneficiary of Participant's DC account balance, or does the prenup rule? Participant did not sign a beneficiary designation form for the plan.

[Lou S.]

Prenup is preempted by ERISA no?

I thought you needed a Postnupt (is that a thing?) to assign benefits to non-spouse.

[david rigby]

With respect to the J&S rules, IRS regulation 1.401(a)-20, Q&A28 is very clear that a pre-nup does not satisfy any consent requirements under IRC 411 and/or 417.

[jpod]

I am assuming it is not a dc pension and the participant had not elected an annuity. It seems clear cut as David Rigby says that the surviving spouse is entitled to 100% of the benefits. Whether those "other beneficiaries" evidently identified in the pre-nup can recover $$ from the surviving spouse or the estate of the decedent is another story.

[My 2 cents]

No QDRO? Without one, wife A is out of the picture.

If the intention is to give the money to someone other than wife B, how could nothing have been done to lock it in? Everyone slept (a la Sleeping Beauty) for the last hundred years? No beneficiary designation, no post-marriage waiver (agree that problem with pre-nup is that wife B's entitlement, absent a waiver as wife B, is automatic upon the celebration of the marriage), nothing? The lack of any sort of follow-up to what was intended to happen is where the problem lies. If it was intended that someone besides wife B receive the balance in the event of the participant's death, how could they all have failed to establish that wife B waived any rights to the pre-marriage balance and to name the intended beneficiary?

[jpod]

Where did the OP or anyone else suggest that Wife A is entitled to anything? And, while you raise good questions unfortunately the only person at fault here can't defend himself, so what's the point.

[Monica Barnard]

Thanks to everyone who responded. I appreciate the source. I was hoping this would be the answer. The kids of wife A are contesting everything.

[jpod]

If those kids (presumably they are all adults) find a good lawyer they should be able to convince Wife B (or at least Wife's B competent attorney) to live up to her pre-nup. While it seems to be clear that only Wife B is entitled to the Plan distribution, I stop here at attempting to provide any advice about domestic relations law or how logistically to accomplish this.

[My 2 cents]

Looking at some regs today, I was amused by the way that it was indicated that the participant's spouse did not waive anything in a pre-nup - it was the participant's fiancee!

Agreed that Wife B may find it convenient to waive her rights in accordance with the pre-nup to avoid costly and unpleasant litigation, but it is clear that in the absence of either a QDRO or a spousal waiver specifically in favor of Wife A or her children, Wife A has no rights with respect to the participant's plan benefits! How would Wife A's children assert any rights with respect to the participant's benefits?

One also wonders whether 20+ years of marriage to Wife B ought to render the pre-nup void. Was there no sunset provision in the pre-nup? If not, shouldn't there have been? Wife B was married to the deceased longer than Wife A. That, by itself, ought to count for something.

[jpod]

Again with the Wife A business! Why the fixation on that?

[K2retire]

One also wonders whether 20+ years of marriage to Wife B ought to render the pre-nup void. Was there no sunset provision in the pre-nup? If not, shouldn't there have been? Wife B was married to the deceased longer than Wife A. That, by itself, ought to count for something.

Logic in government rules -- are you serious?

As a stepmother for 32 years, I find the kids' belief that they are entitled to the plan balance rather than the wife annoying. If their father intended for them to get it, he would/should have completed a beneficiary designation indicating that and including the wife's consent.

[My 2 cents]

Again with the Wife A business! Why the fixation on that?

If Wife A has no rights under the plan, why should her children?

K2retire's comments point out that if the participant had any coherent thoughts on the matter, there should have been a beneficiary designation submitted (at some time during the 20+ years of marriage). Assuming that Wife B remained willing to forego her legal entitlement to the plan benefits (as evidenced by the presumably voluntary signature of the pre-nup), she would have consented.

Idle, random thought - try to imagine the Prince asking Cinderella to sign a pre-nup!