The Wall Street Journal recently published an article on retirement plans regarding who is entitled to a 401K plan when the account holder dies. We thought they made an interesting point. The Federal Employee Retirement Income Security Act or ERISA, dictates that the spouse of the deceased holder of a 401K account will be the presumed beneficiary regardless of who is listed on the beneficiary form. This will hold true unless the spouse has previously consented to naming someone else as beneficiary.
If you want to name someone else as a beneficiary to your 401K plan, like a trust, your children, or a charity, your spouse needs to waive their right. This can usually be done by filing a form with the plan administrator.
If you would like to learn more about these regulations or planning for your estate, please contact us at Torus Law, 804-622-6888.