Beneficiary - Participant deceased and divorced

[jmartin]

A Participant completed a beneficiary form naming his spouse as the primary beneficiary and his sister as the contingent. The participant gets a divorce but does not revise his beneficiary form. He then dies. Isn't the ex spouse still the beneficiary?

[MoJo]

Not meaning to be a smart-alec, but "what does the plan say?"  The document we use specifically voids any bene form naming a spouse upon divorce.  It used to be a state by state issue (some state laws effectively do the same), but then you get into issues of pre-emption and the like, so we drafted the plan to so provide, and put big bold warning on the actual form (website) to indicate that that is what will happen.

[My 2 cents]

Sounds like a good time for an interpleader!  Give the money (you have to pay the same amount in either case, right?) to the court and let the ex-spouse and the sister fight over it while you go on to spend your time productively.

[MoJo]

1 minute ago, My 2 cents said:

Sounds like a good time for an interpleader!  Give the money (you have to pay the same amount in either case, right?) to the court and let the ex-spouse and the sister fight over it while you go on to spend your time productively.

The problem is, the bene may NOT be the sister.  If the bene designation is "void" it could be "void" completely, or may be construed as to "treat" the named (ex-)spouse as having pre-deceased.  This may be a case where the participant is deemed to have died without a valid bene designation form, and then the plan's death distribution provisions could kick in.  It could be the estate....

[My 2 cents]

38 minutes ago, MoJo said:

The problem is, the bene may NOT be the sister.  If the bene designation is "void" it could be "void" completely, or may be construed as to "treat" the named (ex-)spouse as having pre-deceased.  This may be a case where the participant is deemed to have died without a valid bene designation form, and then the plan's death distribution provisions could kick in.  It could be the estate....

True that!  As usual, what does the plan say?

[MoJo]

10 minutes ago, My 2 cents said:

True that!  As usual, what does the plan say?

Which is why I said at the beginning:

"Not meaning to be a smart-alec, but "what does the plan say?""

[david rigby]

Don't forget to search your files for a QDRO (draft or otherwise).  This is easily overlooked in an employer with many locations and/or a non-centralized HR function.

[Peter Gulia]

In addition to considering the other suggestions, the plan's administrator might want its lawyer's advice about whether an interpleader (or some other court proceeding) is or is not appropriate.  ERISA grants a Federal judge discretion concerning attorneys' fees and costs.  If a judge finds there was no real ambiguity that needed the court's decision, the judge might order the administrator that initiated the interpleader to pay or reimburse another party's fees and costs.