Marital status uncertain at death

We have 401(k) participant who died in 2012 and at this point it is not clear whether or not he was married at the time of death:

·       He named son & daughter as beneficiaries in 2007, at which time he stated he was not married

·       He died in 2012; Death certificate shows him as married at time of death, identifies surviving spouse, and lists informant as the surviving spouse, relationship WIFE

·       Son and daughter are now putting in claim for his account balance; son says father was not married at the time of death but that his mother was trying to re-marry his father so she would get some of the money.

Sponsor is presently trying to get some clarification from “Wife” in the way of proof of marriage or an amended death certificate (if not married).

Meanwhile, I welcome any and all ideas on how to address this situation.  The 401(k) balance is in the range of $15,000, and the participant’s relatively small – there was no plan for going through probate.

This is in CALIFORNIA.  Also, what if they were married but in another country (San Salvador possibly).

Ask "spouse" for a copy of her most recent 1040 and see how it describes filing status.  Not conclusive either way, but if it says "single" you may not hear from her again.   

Interpleader action would be conclusive.  

If all else fails interpleader should be threatened, while making the point that the Trustee's/Plan Administrator's legal fees can and will be charged to the Plan and soak up a very healthy portion of the $15,000.  This might induce a settlement.

The "spouse" must establish that she was married to the participant to become entitled to the account.  The administrator should require her to provide a certified copy of a marriage certificate.  The death certificate is not proof of marriage since it only reports the information provided by the informant.  Even a joint tax return is not irrefutable evidence, but the administrator might decide to accept one signed by the participant.

Before commencing a declaratory judgment action, the administrator should follow the plan's claim procedures, denying the "spouse's claim if she fails to provide the requisite proof of marriage (or denying the children's claim if she does).  At the end of the claim appeal process, someone will have a right to sue for the benefits.   The administrator could then bring in the other claimant and let the two sides battle.

Finally, I would not jump to the conclusion that the costs of a court proceeding can be charged to the participant's account.  The determination of the identity of a beneficiary is a fiduciary function that is probably a plan expense.

TEL:  I am confused by your last paragraph.  Aren't those two sentences contradictory?  Assuming the plan has the usual boilerplate language about the plan being able to pay administrative expenses, under what scenario would the legal fees and other costs associated with an interpleader NOT be expenses which the plan could pay?

I think TEL is making the distinction between charging it to the Plan vs. charging it to the participant.

What would be the concern about charging it entirely to that participant's account?

You can only do that if the SPD says that is what the Plan does.

In my experience, rigorously and carefully following ERISA 503 claims procedures, including explaining every reason for a denial, often results in a further flow of information.

Perhaps I need to clarify a llitte.  At this time, the two adult children have put in a claim for their father's money.  We have heard nothing from the "spouse" - what we are trying to determine is if there is in fact a legal spouse in order to determine if the children are still the legal beneficiaries.  The spouse, wife, ex-wife, or whatever she is has made no claim thus far.