“To the person I am married to at the time of my death”

Before Vanguard exited its “Individual 401(k)” business, Vanguard sent a customer a “beneficiary verification” that included this information:

Beneficiary                  To the person I am married to at the time of my death

Backup Beneficiary     Benjamin Brother 50% / Roberta Relativebyaffinity 50%

Here’s what I don’t know:

Could the lingo “To the person I am married to at the time of my death” have resulted from Vanguard recording exactly what the participant typed in the website?

Or had a participant tried to type in that phrase, would Vanguard’s system have rejected the entry because it was too many characters or because it seemed not to be a name?

Did Vanguard set up that lingo as a programmed choice a user could click on?

Did Vanguard set up that lingo as a plug-in for a situation in which the participant declined to name a beneficiary and Vanguard’s records about a participant showed the participant as having a spouse?

In the circumstances I’m advising about, whether “To the person I am married to at the time of my death” resulted from the participant’s considered writing (which might be plausible because the participant had filed a divorce petition, and was lawyer-advised), or partly or wholly because of something Vanguard set up might matter in how the retirement plan’s administrator interprets the participant’s “backup” or contingent beneficiary designation.

BenefitsLink neighbors, thank you for your gracious help.

Believe it or not Peter, that's a Vanguard choice their lawyers must have made after partying too hard. See:

https://investor.vanguard.com/investor-resources-education/beneficiaries/adding-beneficiaries-to-ira

blguest, thank you for pointing me to a Vanguard explanation that tends to confirm some of my educated-guess suspicion.

It seems Vanguard permits an IRA holder (and might have permitted an “Individual 401(k)” participant) to specify a spouse beneficiary without a name, instead specifying the relationship.

(Vanguard explains that such a designation might guard against some potential consequences of an IRA holder’s failure to change one’s beneficiary designation.)

Very bold to assume I'm only married to one person... ! 😁

Vanguard’s programmed click-on “To the person I am married to at the time of my death” might help an IRA holder guard against one’s forgetting to change a beneficiary designation.

It’s astonishing that Vanguard Fiduciary Trust Company seems willing to accept the burden of receiving and evaluating evidence about whether an IRA holder was married and to whom she was married.

I remember seeing that language in contexts other than for IRAs, Peter, so your surmise Vanguard may have used it in a 401(k) context is probably correct. They did use it in a 403(b) context as of 2008-2010 as well: https://hr.ucf.edu/wp-content/uploads/sites/17/Vanguard-Application.pdf. 

blguest, thank you for adding information that tends to support my surmise that Vanguard used similar beneficiary-designation software for a few kinds of retirement plans.

Peter - if you look at the "default" beneficiary language in the pre-approved plan documents, you will find perfect examples of a "nameless" beneficiary.  Providers using pre-approved plans don't like tracking down beneficiary designations and their changes.

>In many states the law is that a divorce will automatically terminate (lapse) a bequest to a former spouse.>

>Many state have adopted anti-lapse states such as Maryland where the applicable law is: 

"(a)    Unless a contrary intent is expressly indicated in the will, a legacy may not lapse or fail because of the death of a legatee after the execution of the will but prior to the death of the testator if the legatee is:

        (1)    Actually and specifically named as legatee;

        (2)    Described or in any manner referred to, designated, or identified as legatee in the will; or

        (3)    A member of a class in whose favor a legacy is made.

    (b)    A legacy described in subsection (a) of this section shall have the same effect and operation in law to direct the distribution of the property directly from the estate of the person who owned the property to those persons who would have taken the property if the legatee had died, testate or intestate, owning the property.

    (c)    Creditors of the deceased legatee shall have no interest in the property, whether the claim is based on contract, tort, tax obligations, or any other item."

>Most competently prepared Wills will include a provision that "if the parties shall die in a common disaster under circumstances of their deaths cannot be determined, it shall be conclusively presumed that Mary predeceased John."   Suppose Mary is presumed to die first. Is she still John's spouse? 

>On the other hand is you are dealing with a TSP they will follow the instructions set forth in their form of beneficiary designation, however, their regulations say:

        “A will, prenuptial agreement, separation agreement, property settlement agreement, or court order will not override either a beneficiary designation or the order of precedence." 

>In my practice I run into many plan rules that will afford benefits to spouse but not to former spouses unless the employee enters pay status prior to the divorce.  Example:  Many police, firefighters and correctional officer pension plans. 

>In South Carolina the parties can sign a Marital Settlement Agreement whereby the parties will waive any claim against the other party's estate or pursuant to the other party's Last Will and Testament or pursuant to the applicable laws of intestate distribution, and this agreement will be approved by the court and will actually be incorporated into a Court Order, BUT the parties still are required to wait until the expiration of 12 months from their separation before the actual divorce becomes final.  What happens is one of them die?  Is the other party still a "spouse" or "wife" or "husband"?  How will the Agreement impact the outcome? 

>Lawyers get sued all the time for not covering all of the possible bases.  The Roman philosopher, Seneca, said: 

"Thinking everything might happen; anticipate everything"  That's why lawyers have OCD. 

Here is a painting by Peter Paul Rubens of Seneca at the time of his death.

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