401(k)s, IRAs and Spousal Waivers

When you open a 401(k) or IRA account, you will be asked on the application to designate beneficiaries for that account. In the event of your death, the account beneficiary or beneficiaries will inherit the account despite anything that might be in your will to the contrary. It is important, therefore, to consider carefully who you designate and to review those designations on a regular basis.

For a 401(k), ERISA rules stipulate that a spousal waiver must be obtained if you want to designate anyone but your spouse as the beneficiary and courts are upholding the spouse’s right to the 401(k) funds even in the case of a recent marriage (less than one year) where the children of a previous marriage of the deceased account owner are the listed beneficiaries on the 401(k). If you would like to name anyone besides your spouse as the beneficiary for your 401(k) retirement assets you must obtain a spousal waiver if you are currently married. If you are not presently married, you might consider moving some or all of the funds to an IRA where the account owner has full discretion to name his or her beneficiaries as desired.

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