Legal Blog

The Weekly Scenario: Post-Nuptial Agreement & Beneficiary Changes in Retirement Plans

Question: Is a post-nuptial agreement, where both spouses consent to a beneficiary change in the other’s retirement plan, sufficient for the spouse to waive such benefit? Answer: Probably not. Generally, a plan participant’s spouse is entitled to be the beneficiary unless he or she waives that right. Such a waiver must conform to several requirements, including (under ERISA) that the spouse’s consent acknowledges the effect of such election and is witnessed by a plan representative.

In terms of a spouse’s consent, often these agreements do not properly inform the spouse that she had a spousal right to the plan and that she was in fact waiving the right. ERISA has particularly strict requirements for waiving spousal rights. While it is possible that the post-nup will be sufficient, the best solution is usually to go to the plan administrator and request a waiver from its own wavier documents. Such waiver should hold up if properly executed. Comment: There was a recent 2013 court decision on this very issue (Court of Appeals for the Eighth Circuit) if anyone is interested please contact me.

If you have any questions or would like more information please contact Steve Shane at: sshane@offitkurman.com | 301.575.0313.

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ABOUT STEVE SHANE

Steve Shane Head Shot for webSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

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