Beneficiary Designations and Divorce

Participant designated family member before marriage, gets married, and then gets divorced.  Is the initial beneficiary designation reinstated or did the marriage void it?

Very likely, the Plan will consider this as two separate events (who wouldn't?).  In such case, the marriage event causes an automatic change of beneficiary to the spouse.  The divorce might (check the plan document) automatically invalidate the beneficiary designation, but such provision is not required.  Do two things: (1) read the document, and (2) get the participant to submit a new beneficiary form.

Don't look for ways to cut corners, esp when the solution is so simple.

If ERISA’s title I governs the plan:

After what you describe as the initial beneficiary designation, did the participant make a new, revised, or reaffirmed beneficiary designation before, during, or after the marriage?

What might the plan’s governing documents provide?

Does the beneficiary-designation form, whether paper or electronic, the participant signed or used provide anything about the effect of an end of a marriage?

Has the administrator recognized a qualified domestic relations order?

If so, does the QDRO direct treating the former spouse as a surviving spouse for any portion of the participant’s benefit?

If there is no other document, what does the plan’s administrator’s procedure provide?

If the plan’s administrator’s procedure does not speak to the situation, what is the administrator’s best reading of the participant’s beneficiary designation?

The beneficiary designation form was executed by the participant in 1988.  She married after the fact and made no changes to the designation.  She has since passed away.  The plan provides that a spouse must consent to an alternate beneficiary designation.  No such consent is on record and the participant's daughter has been named as executor of her estate.

One imagines the plan does not require a participant to get one’s spouse’s consent when the participant has no spouse.

If so, a beneficiary designation made before the participant’s marriage began did not require a spouse’s consent. And a beneficiary designation made (or continued) after the participant’s marriage ended did not require the former spouse’s consent.

Many plans do not provide that a marriage undoes a previously made beneficiary designation. Rather, many plans provide that a beneficiary designation does not apply to the extent that it would provide to a person other than the participant’s surviving spouse a death benefit the plan provides to the surviving spouse (sometimes, only as needed to meet ERISA § 205).

If the participant’s marriage ended before the participant’s death (and no QDRO calls the plan to treat a former spouse as a surviving spouse), there might be no death benefit of a surviving spouse that a beneficiary designation would invade.

The plan’s administrator’s inquiry might be whether the 1988 beneficiary designation continued until the participant’s death.

This is not advice to anyone.

ERISA requires that the plan administrator follow the plan documents and pay plan benefits to the beneficiary as determined under the plan. Thus, the determination of who is entitled to benefits under a plan as the beneficiary of a deceased participant depends on the plan's terms.  Without knowing the language of the plan, I do not believe anyone can accurately respond to your question.   

The responders above all have solid questions and thoughts but without the terms of the plan each is responding with hypos or using assumptions.  Note Peter Gulia's response contains "One imagines", "If so," "Many plans," "and no QDRO" with his ultimate conclusion being a question.   

You state that "The plan provides that a spouse must consent to an alternate beneficiary designation."  If, for example, the plan uses typical wording such as "Any designation by a married Participant of a Beneficiary other than the Participant’s spouse will not be valid unless the Participant’s spouse consents in writing to such designation (which consent acknowledges the effect of such designation, the identity of any non-surviving spouse Beneficiary, including any class of Beneficiaries and contingent Beneficiaries, and is witnessed by a member of the Plan Administrator or a notary public)..., " then a conservative reading of this type of language would be that the 1988 beneficiary designation is invalid because, upon the new marriage (after the filing of the 1988 designation), the Participant's new spouse did not consent in writing to the prior designation (even if a prior spouse had consented to the designation).

Like Peter G... not advice (just thoughts) 

Following up on Peter Gulia's, the law is that spousal consent Is always required when changing a beneficiary in all types of qualified retirement plans, even if there are no QJSAs or QPSAs.  A spouse must give consent if a married participant is changing the designated  beneficiary to someone other than the spouse. The spouse is the default beneficiary for married participants. For example, if a married participant wants to designate their child from an earlier marriage as either the primary beneficiary or a co-beneficiary, they will need to get their spouse to consent to this change. But, as Peter pointed out, the foregoing does not line up with your factual premise.  

First of all who are you? Attorney for the Plan?  Attorney for the named beneficiary? Attorney for the estate of the decedent?  

What is/are the exact question(s) you are trying to resolve? 

Is this an ERISA qualified plan?  Or a state, county or municipal plan?  Or a plan operating under other Federal laws, e.g. CSRS, FERS, FSPS, Military, etc?  Or is it a union or church plan?* 

Are you talking about an employer sponsored defined contribution plan or an employer sponsored life insurance plan?

What law or regulation leads you to believe that the original beneficiary designation was voided when the Participant married?  

What provisions in the Plan documents leads you to believe that the original beneficiary designation was voided when the Participant married? 

What law or regulation leads you to believe that the Participant's spouse automatically became the beneficiary of the plan benefit? Keeping in mind that this is not a defined benefit plan where pursuant to ERISA the law automatically vests in the spouse a right to a QPSA and a QJSA?  

Confirm that the named original beneficiary occupied that status at the death of the participant, that is, had not been removed? 

Was a QDRO issued in connection with the divorce that gave the new spouse a share of the plan benefits? 

Would that QDRO supercede the prior beneficiary designation?  Pursuant to what law or regulations?  

How does Federal preemption fit into the issues you have raised. 

In Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 555 U.S. 285, 299-304 (2009), the Supreme Court held that retirement plans may rely on the plan terms and beneficiary designation forms in determining the proper recipient of survivor benefits. Why wouldn't that apply in this case? 

Read PaineWebber v.  East, 363 Md.  408, 768 A.2d 1029 (2001).

Did the Plan documents in you case have provisions that set for the order of precedence in the event of a situation that you described. For example, if you are dealing with a Federal Thrift Saving Plan account the law and the regs provide:  “A will, prenuptial agreement, separation agreement, property settlement agreement, or court order will not override either a beneficiary designation or the order of precedence." That order of precedence is:

To your widow or widower.
If none, to your child or children equally, and descendants of deceased children by representation.
If none, to your parents equally or to the surviving parent.
If none, to the appointed executor or administrator of your estate.
If none, to your next of kin who is entitled to your estate under the laws of the state in which you resided at the time of your death.

But assuming that the proceeds of whatever benefit you are dealing with passes to the named beneficiary, who stands next in line is that beneficiary designation is deemed to have been revoked?  Does the named beneficiary get the money in hand and then be subject to a post distribution suit?  See,

Andochick v. Byrd, 709 F.3d 296 (2013),

 In re: Marriage of Stine, No. A154972, Court of Appeals of California, First District, Division One, - Filed November 22, 2019 - that you can find at -
https://scholar.google.com/scholar_case?case=17865274454005199096&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:14880692104701005079:AAGBfm2qi1_JaXLJvydb4f3quYTnTlLkbA

Hennig v. DIDYK, Tex: Court of Appeals, 5th Dist., 438 S.W.3d 177 (2014). 

All of these cases, and many more, were the response to the language in Kennedy, footnote 10, that: 

""Nor do we express any view as to whether the Estate could have brought an action in state or federal court against Liv to obtain the benefits after they were distributed. Compare Boggs v. Boggs, 520 U.S. 833, 853, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997) ("If state law is not preempted, the diversion of retirement benefits will occur regardless of whether the interest in the pension plan is enforced against the plan or the recipient of the pension benefit"), with Sweebe v. Sweebe, 474 Mich. 151, 156-159, 712 N.W.2d 708, 712-713 (2006) (distinguishing Boggs and holding that "while a plan administrator must pay benefits to the named beneficiary as required by ERISA," after the benefits are distributed "the consensual terms of a prior contractual agreement may prevent the named beneficiary from retaining those proceeds"); Pardee v. Pardee, 2005 OK CIV APP. 27, ¶¶ 20, 27, 112 P.3d 308, 313-314, 315-316 (2004) (distinguishing Boggs and holding that ERISA did not preempt enforcement of allocation of ERISA benefits in state-court divorce decree as "the pension plan funds were no longer entitled to ERISA protection once the plan funds were distributed")."  (Emphasis supplied.)

Your search query will include "post-distribution" 

DSG

*See attach a pretty comprehensive list of the types of plans, qualified and non-qualified that exist in the USA. 

List of Defined Contribution & Benefit Plans- Qualified or Not - 04-14-2023.pdf