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Q&A Can a married employee name a 401(k) beneficiary other than a spouse?

Clarifying Questions


Q: Can a married employee name a beneficiary other than spouse on 401(k)

–Helpful Boss



A: Dear Helpful:

It can be very difficult for you, as an employer, to manage a 401(k) retirement plan for your employees properly. Federal law establishes protections for married couples known as “survivor’s rights.” Generally speaking, survivor’s rights do not allow one spouse to exclude the other spouse from receiving a portion of his or her company 401(k) account. Survivors’ rights require written spousal consent to waive any 401(k) interest.

When a married employee retires, he or she must take retirement payouts in a way that continues to pay his or her spouse for life. The only way an alternative payout can be chosen is if the spouse executes a written waiver.

This spousal protection even overrides beneficiaries that an employee may name for the account. Additionally, by law, not even prenuptial and postnuptial agreements can change the requirements.

There is one major exception to this rule, and it does not directly impact you as an employer. Suppose a married employee rolls over a 401(k) balance to an individual retirement account. In that case, the retirement assets lose the survivor’s rights protection and can be distributed in any way the employee chooses.

Administering a retirement plan can be tricky, but you don’t have to go it alone. As your Personal Family Lawyer® with business planning expertise, we can guide and support you each step of the way.

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