Who's the Bene?

[EHE]

Opinions please.   Participant names Bene.   Part dies and it is determined that the  Bene died prior to the Part.   I say that the Bene designation became void when the Bene died and the account should go to the Part's estate (assuming no contingent bene and the document specifies the estate is the default).  Others are opining that the account goes to the Bene's estate.  Which do you agree with?  Thanks for your help!!

[My 2 cents]

Just now, EHE said:

Opinions please.   Participant names Bene.   Part dies and it is determined that the  Bene died prior to the Part.   I say that the Bene designation became void when the Bene died and the account should go to the Part's estate (assuming no contingent bene and the document specifies the estate is the default).  Others are opining that the account goes to the Bene's estate.  Which do you agree with?  Thanks for your help!!

My vote is that the beneficiary has no rights to any of the benefits at all unless the beneficiary survives the participant.  Being designated as beneficiary gives no rights with respect to the participant's benefits until after the participant has died.  If there is no other beneficiary designation and no contingent beneficiary and the beneficiary died first, then it goes to the default beneficiary (assumed to be the participant's estate).  I have no idea where the "others" are coming up with their opinions. Please do bear in mind, though, that I have never seen the plan and I am not a lawyer!

[david rigby]

I agree, with the usual caveat: What does the plan say?

 

[CuseFan]

My two cents are with My 2 cents.

[jpod]

I think it is a much tougher case than that if the Plan is silent and doesn't say what happens if the B dies first, although perhaps there are court opinions out there which serve as a basis for My 2 cents' view with which I am not familiar. 

[My 2 cents]

Every plan I have ever seen either is utterly silent (alas!) or is quite clear that the beneficiary has to survive the participant.  The language concerning default beneficiaries will often say "If the participant does not designate a beneficiary or if the beneficiary does not survive the participant..." or some such.  It strikes me as the only reasonable approach.  I cannot imagine a plan document preserving the beneficiary's interest if the beneficiary dies before the participant.  No idea what court cases are out there, but I would say (again, not speaking as a lawyer) that any court case to the contrary would have necessarily been wrongly decided.

[EHE]

Thanks all for agreeing with me.    The plan document is silent. Frankly I don't think I've seen a plan document that addresses this issue.  

[ESOP Guy]

1 minute ago, EHE said:

 The plan document is silent. Frankly I don't think I've seen a plan document that addresses this issue.  

Double check the document.  I would say most of the documents we have around here tell use what happens if the beneficiary dies before the participant dies.  They are pretty clear that part of the beneficiary election is void and you go to a contingent beneficiary lacking that it is as if the person died without an election. 

[K2retire]

15 hours ago, EHE said:

Thanks all for agreeing with me.    The plan document is silent. Frankly I don't think I've seen a plan document that addresses this issue.  

Keep in mind that while the adoption agreement is silent, it may be in the base plan document.

[Belgarath]

What K2 said. While I have not specifically looked in many documents for this, those where I HAVE needed to look have always had language in the base plan document. Typically spouse, "issue", parents, estate, etc.

[Earl]

If it is still the dead bene's, why is there a contingent bene?

[My 2 cents]

46 minutes ago, Earl said:

If it is still the dead bene's, why is there a contingent bene?

To cover the situation where the designated beneficiary predeceases the participant and only that situation.  If the participant dies but is survived by the beneficiary, then the death benefit belongs exclusively to the beneficiary.  I suspect that few, if any, pension plans permit the beneficiary who is to start receiving death benefits to elect his or her own beneficiaries for those death benefits (to cover the death of the receiving beneficiary prior to the completion of the payment of those death benefits).  At least that is my understanding.