The result of a recent Supreme Court case involving rights to an employer-sponsored retirement account following a divorce decree underscores the importance of securing experienced family law counsel in any divorce matter that involves substantial financial interests. That is true for residents in Fulton County and elsewhere throughout the country, and especially in a high-asset divorce.
The facts of the matter ruled upon by the Court are quite straightforward. A couple was married in 1974. Shortly thereafter, the husband began participating in his company’s 401(k) retirement program, naming his wife as beneficiary.
The marriage didn’t last, and the couple divorced 20 years later, in 1994. As part of their divorce settlement, the wife gave up her rights to the account, which was worth more than $400,000.
The problem: The ex-husband forgot to formally change his beneficiary in the manner mandated by the company plan. After he died, his estate argued that the omission wasn’t legally fatal, given that the divorce decree language trumped.
The Supreme Court disagreed, stating that all changes to the company plan needed to be made in conformity with what the plan required. In the case of the couple, that meant the husband formally removing his wife as beneficiary, which he never did.
The Court awarded the entire 401(k) sum to the ex-wife, over the estate’s strong objections.
Where considerable assets are involved, divorce can bring up a number of issues such as the above. A family law attorney experienced in high-asset property division can spotlight such matters and provide diligent representation of a divorcing party’s legal interests.
Source: Thomson Reuters, “Is our ex going to inherit your 401(k) plan account? Are you sure?” Oct. 28, 2011