The Financial Rights of First Wives
Spoiler alert: The following post reveals plot twists in Season 3 of Weeds.
In Season 3 of Weeds, recently released on DVD, Mary-Louise Parker's character inherits life insurance and pension payouts from her husband, who died suddenly. Even though their marriage, which was kept a secret, lasted only a short period, the money went to Parker's Nancy Botwin, and not his ex-wife of 11 years.
This development struck me—and the ex-wife—as unfair. Why does a six-month marriage trump more than a decade of shared living (and a marriage that created a son)? Shouldn't that ex-wife get at least some of the money?
I took those questions to a couple lawyers who specialize in such affairs. John Olivieri, a partner at law firm White & Case's private clients practice, says he and his wife chuckled over the show's portrayal of the law. "The show was a little bit false," he says, because individuals usually select their life insurance beneficiary. It would have been easy for the husband on the show to select his son or ex-spouse as a beneficiary, although companies often have defaults—such as a spouse—if no one is selected. The same is true for pensions. (With 401(k)'s, however, spouses have an "absolute right" to be named the beneficiary and must be informed if the money is going elsewhere, says Olivieri.)
Those complications are why Marilyn Chinitz, matrimonial litigator and partner at Blank Rome, recommends working out life insurance and pension logistics during the divorce settlement. For example, the settlement might specify that the ex-spouse is entitled to a portion of the life insurance payout. That way, Chinitz says, all of the questions about where assets go at death are resolved at the time of the divorce.
Sometimes, Olivieri adds, divorcing spouses are required to purchase additional life insurance for the benefit of the divorced spouse or children. "It's very common to be required to maintain a certain amount of insurance and to have it decrease over time," he adds.
There is one glimmer of good news for ex-wives and ex-husbands, however. Social Security benefits do get paid out to surviving ex-spouses, as long as the marriage lasted at least 10 years.
Tags: money | marriage | divorce
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Financial Rights of First Wives
I hate to be a stickler for details, but the absolute right is not absolute. There is a specific provision in the regulations that allows for exceptions for short-term marriages.
Question 26 of Regulation 1.401(a)-20 allows a plan to require that a participant be married for at least a year. Other than that, the participant’s spouse must waive their right to be the beneficiary. The following may be helpful:
Requirements of qualified joint and survivor annuity and qualified preretirement survivor annuity
§1.401(a)-20
Q-32: What rules govern a participant’s waiver of the spousal benefit under section 401(a)(11)(B)?
A-32: (a) Application. In the case of a defined contribution plan that is not subject to the survivor annuity requirements of sections 401(a)(11) and 417, a participant may waive the spousal benefit of section 401(a)(11)(B)(iii) if the conditions of paragraph (b) are satisfied. In general, a spousal benefit is the nonforfeitable account balance on the participant’s date of death.
(b) Conditions. In general, the same conditions, other than the age 35 requirement, that apply to the participant’s waiver of a QPSA and the spouse’s consent thereto apply to the participant’s waiver of the spousal benefit and the spouse’s consent thereto. See Q&A-31. Thus, the participant’s waiver of the spousal benefit must state the specific nonspouse beneficiary who will receive such benefit. The waiver is not required to specify the optional form of benefit. The participant may change the optional form of benefit, but not the nonspouse beneficiary, without obtaining the spouse’s consent.
Richard N Carpenter, CPC, CEBS
PO Box 25974
Christiansted, St Croix, US Virgin Islands 00824
404-277-7678
340-514-4714
RNC@USVIpensions.com
Financial Rights of First Wives
Chuckling at the protrayal of divorce in the media? The litigants among my membership become enraged, dismayed, disgusted, for the truth of what decent first spouses in contested divorce actions end up with post divorce customarily leaves them, especially the wives, eating cat food after 20 some odd years marriage.
Kim Lurie
The Alliance to Restore Integrity in Divorce
President
First wife syndrome!
Isn't it interesting how a successful man can divorce his wife, make sure she gets no alimony and not even be cordial at the wedding of his daughter?
He got the 1.8 million airplane, the boat in the Bahamas and is too chicken to even say hello to the woman who provided him his children.
The second wife, never wanted children of her own or his children and she controls the show. His mother, his children all follow the money, HIS!
Try to get a life at 63, sick, on disability while he is with the Queen of the Trailer park! Seriously!
God Bless America!
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