Desperate Hosewives Example
In Ed’s 2-Day IRA Workshop he uses the example of the Desperate Housewives show where the elderly lady’s husband dies and she puts his body in the freezer in her basement. She did this because in the night she found his beneficiary form to his Pension Plan and realized that he had never taken his ex-wife off the form and added her.
For company retirement plans is it not required that the spouse must be the primary beneficiary and the spouse must sign a disclaimer if it is going to be anyone other than the spouse? Would these pension benefits really go to the ex-wife and not his wife of 34 years (as she said in the show)?
Permalink Submitted by Alan Spross on Tue, 2008-04-08 02:33
I wonder how freezing him was supposed to improve the situation :).
Actually, after a waiting period of a year or so, federal law automatically makes the current spouse the beneficiary on an employer plan. Her real problem might have been that she DID sign a waiver many years ago and had long since forgotten about it.
The spouse typically must sign the waiver when the original beneficiary designation is made, but after that there is the potential for many unreported marital changes to occur. I am not sure how many plans automatically ask the employee to get a spousal waiver or re visit the beneficiary designation even after a re marriage is reported to HR. Therefore, the federal law is probably instrumental in a number of cases.
Permalink Submitted by Al Fry on Tue, 2008-04-08 18:30
Unless Congress fixes the Estate tax mess, there will probably be a lot of people frozen late next year, then thawed out in 2010. In addition, there is expected to be a huge power surge in the US after 11 pm on December 31, 2010, when a multitude of ventilator plugs will be “inadvertantly” knocked out by the vacuum sweepers.
Permalink Submitted by Alan Spross on Tue, 2008-04-08 19:31
And here is the latest, at least starting out with the idea of simplification:
http://tax.cchgroup.com/news/headlines/2008/nws4408.htm#2