Estate Planning

FAQs About Estate Planning

Can I Name Someone Other Than My Spouse As Beneficiary Of My 401(k)?

by Rania Combs

A concerned relative contacted me. Her cousin had been married for eight years before her recent death. Her deceased cousin had a son from a prior marriage.

Her cousin started a 401(k) plan three decades before her marriage and she wondered whether her cousin’s son would be entitled to any portion of the 401(k).

A 401(k) plan is a “qualified” retirement plan created for employees that must meet specific IRS rules in order to qualify for federal tax benefits.

Qualified retirement plans are governed by federal law which requires that a surviving spouse inherit all the money in the account unless the spouse has signed a waiver during the marriage authorizing that a different beneficiary be named.

This is the case even if a prenuptial agreement has been signed. Additionally, just because a spouse signs a waiver at some point in the marriage doesn’t prevent the spouse from withdrawing consent at a later point in time.

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