Spouse as Automatic Beneficiary of 401(k)
An author of a recent article in a major retiree magazine recently wrote ” when you marry, your spouse is entitled to every penny in your 401(k) from the moment you both say, I do That’s the federal law. The beneficiary form is irrelevant, and so is your will. If you want a different outcome…….you can ask your spouse to waive his/her right and that waiver must be in writing, notarized or witnessed by a plan rep and filed with your plan”.
Assuming the author is correct, that is a major difference from an IRA where the beneficiary designation does prevail. Am I correct? Also, how are annuities held at entities such TIAA-CREF/VALIC treated in this regard?
Permalink Submitted by Alan - IRA critic on Sat, 2014-06-07 19:12
The author is basically correct, as qualified plans fall under ERISA. An IRA beneficiary can be anyone except in community property states where custodians will usually request a waiver if the IRA owner is married and wants to name a non spouse as beneficiary. The custodians you mentioned would reflect the prior rules depending on the type of plan they held, ie most all 403b plans are subject to ERISA and follow the spousal beneficiary rules. A NQ annuity would not.
Permalink Submitted by Richard Rea on Mon, 2014-06-09 23:42
“An IRA beneficiary can be anyone except in community property states where custodians will usually request a waiver if the IRA owner is married and wants to name a non spouse as beneficiary. “On a recent update to “primary beneficeris” to my rollover IRA with TDAmeritrade where I left an increased amount to each of my three adult children, my wife’s signature on the TDAmeritrade form had to be notorized which is the first time I have seen that from them. I live in a community property state i.e. Washington.