[WSBAPT] CA life insurance & 401k

[Eric Nelsen]

Forgot to mention--this is a common problem, the conflict between ERISA and state law, and so sometimes the financial custodian and/or the life insurance company thought ahead, and the 401k terms of contract, or the life insurance policy, explicitly provide for an alternative beneficiary in the event a spouse is named and there is a subsequent divorce. So the actual policy and 401K contract terms should be reviewed to see if they provide for this circumstance. But if there is no such contract provision, if ERISA applies, it permits the custodian to completely ignore state law in favor of following the exact contractual designation of beneficiary.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

Please Note that We Have Moved. We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel). Our new address is 1417 31st Avenue South, Seattle WA 98144. All other contact information remains the same.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Tuesday, January 17, 2017 10:55 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] CA life insurance & 401k

Depends on whether the life insurance and/or 401k were employment-based benefits. If they were, then ERISA controls (federal law, trumps any contrary state law) and the ex-wife gets everything. If they were purchased/funded independent of employment, then ERISA does not control and CA law might.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

Please Note that We Have Moved. We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel). Our new address is 1417 31st Avenue South, Seattle WA 98144. All other contact information remains the same.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Mary Stone
Sent: Tuesday, January 17, 2017 10:30 AM
To: 'WSBA Probate & Trust Listserv'
Subject: [WSBAPT] CA life insurance & 401k

I have a friend whose 48 Y/O brother died unexpectedly on Christmas Eve, a resident of California. He was divorced with two children - one adult and one minor.  The friend says that her brother has life insurance and a 401k and it still names the ex-wife as the beneficiary.  Does that designation lapse after the divorce under CA or federal law?

Thank you.

Mary Stone
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