The Michigan Court of Appeals, in a case that was quite shocking to me (read here), recently held that the requirement that a surviving spouse consent to a beneficiary designation under ERISA trumps a pre-marriage election made by the plan participant. In this case, the gentleman who died had named his son as beneficiary of his personal savings plan (PSP). He subsequently married and then later died. The wife petitioned the court to determine that she, not the deceased gentleman’s son, was entitled to the funds from the PSP account. The court determined that the clear language of section 1055(c)(2) of ERISA and the fact that the wife did not consent to the change entitled the wife to the funds.
I must admit, wording of the statute as such or otherwise, it amazes me that a surviving spouse’s consent literally trumps whatever designation the deceased spouse may have made prior to the marriage. Please share your thoughts – I’m curious to know if I am the only one who disagrees with that outcome.