The division of retirement benefits can be problematical in the event of death and remarriage. Employee Retirement Income Security Act (ERISA) regulates almost all pension plans. Retirement benefits, under ERISA, must be transferred from the owner to a spouse under a qualified domestic relations order (QDRO).
If the spouse who owns the benefit rights has remarried or died, the question arises about ability to enter a QDRO which divides survivor benefits. Often timing of events plays a part in this equation. This process can involve both state and federal court systems.
Complicated Legal Process
Remarriage or death may prevent enforcement of a QDRO. Case law resolves the conflict between the rights of former and present spouses. It gives priority to the rights which were vested first. Existing benefits can be divided by state court orders. But new benefits cannot be created if unavailable to the owning spouse under the terms of the plan.
Enforcement of state court orders benefiting a former spouse are provided for by ERISA. However, ERISA also protects current spouses through substantive rules under federal law. In some scenarios, present and former spouses often have conflicting rights.
Unsworth LaPlante, PLLC in Vermont can help you sort out benefit rights and Estate Planning.
Stephen Unsworth
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