Unnamed contingent beneficiaries: Children or Estate

Owner does not want to complete beneficiary form because his spouse is his primary beneficiary and he has completed estate planning that his children are contingent for all accounts. 

Am I correct that a plan specific form needs to be completed so that the children would be considered contingent, otherwise should spouse predecease or owner & spouse die simultaneously, the plan's benefits will go to the estate rather than to the children?

14 minutes ago, TPApril said:

Owner does not want to complete beneficiary form because his spouse is his primary beneficiary and he has completed estate planning that his children are contingent for all accounts. 

Am I correct that a plan specific form needs to be completed so that the children would be considered contingent, otherwise should spouse predecease or owner & spouse die simultaneously, the plan's benefits will go to the estate rather than to the children?

You are correct that without a plan specific beneficiary designation the default language in the plan document would determine the order.

TDApril, as Mike implies, read the plan document provision. Some say the account goes to estate if no surviving spouse, but a lot of plans will say that in the absence of a surviving spouse the account will go to children.

In fact I prefer the documents to say if there is no beneficiary and no surviving spouse it list a few types of family members the benefit goes before it says it goes to the estate. 

Paying benefits to an estate is a major pain for the family involved.

Unless there is a state law that helps out often times that means the family has to get an EIN for the estate.   You can't send a benefit paid to an estate to an IRA so the estate has to pay taxes.   

You watch how much work it is to get an estate paid is for a family and you will never fail to complete a beneficiary form ever again.

After recognizing a surviving spouse’s rights (whether ERISA-mandated or otherwise plan-provided), practitioners and plan sponsors have a range of views about what default-beneficiary provisions make sense.  And even those answers can vary with circumstances about a plan’s administration.

ESOP Guy is right that someone who understands difficulties that can result from the absence of a designation is much less likely to neglect making a designation.

A default of the participant’s children also can burden a claimant.

For example, if a plan’s claims administrator receives a claim from someone who proves she is the participant’s daughter and says she is her mother’s only child, must the administrator require some further evidence to prove the claimant is the participant’s only child?

How does one prove the non-existence of more children than the claim names?

And if a whole account balance is paid out but the administrator later receives a claim from the participant’s second child, what is the plan’s obligation to the participant’s children beyond the one who was paid?