Is A Prenuptial Agreement Enough to Ensure That My Wishes Are Followed for Retirement Benefits?
There is no question that prenuptial agreements have become important tools in ensuring that a couple can come to an agreement before marriage as to how certain financial matters will be handled. For a number of couples, this is especially important if they have previous families from previous marriages and want to ensure that their families will be well taken care of alongside their pending marriage.
Prenuptial agreements are also binding insofar as they comply with the law. For example, any provision included that attempts to waive a duty to pay child support will be deemed unenforceable because the law dictates that it is in a child’s best interest to have financial support from both parents.
However, it isn’t always just the obvious laws that must be complied with in order to prevent litigation later on when it comes to a prenuptial agreement; court battles can also occur over retirement benefits, for example, as we discuss below.
Other Legal Requirements
One additional law that must also be complied with, for example, is the Employee Retirement Income Security Act (ERISA), which dictates that a married individual’s pension benefits under an employer retirement plan must be paid to their surviving spouse unless they have obtained a waiver and complied with very specific instructions, including the following:
- The spouse consents to the benefits being paid to someone else, in writing
- This consent is witnessed by a notary public or plan representative
- This named beneficiary is not changed later on without the spouse’s consent
As a result, simply dictating that a spouse will not be receiving retirement benefits from an employer-sponsored plan in a prenup is not going to be enough to stay out of court; an attorney who is working to ensure that the wishes of the prenuptial agreement are fulfilled must also ensure that the waiver requirements are taken care of at that same time.
Going to Court
When a prenuptial agreement and beneficiary forms dictate that benefits under an employer’s plan are to be left to a non-spouse, but ERISA’s specific waiver requirements have not been complied with (for example, the spouse never signed a waiver or consented to this person receiving the benefits in writing), different courts have ruled differently in terms of whether the named beneficiary has a right to sue the spouse to try and obtain these benefits. While some have ruled that a promise in a prenuptial agreement does not satisfy the requirements of ERISA and is therefore not binding, others have rejected this contention, finding that the lack of a valid ERISA waiver does not preclude the named beneficiary from pursuing a breach of contract action against the spouse who ended up receiving the benefits.
However, if this is necessary – and it only would be if the attorney who executed the prenuptial agreement failed to complete the waiver process under ERISA at the same time – it inevitably leads to claims and competing claims and long court battles; the lesson learned being that it is far better and easier to simply be as thorough as possible in completing any and all actions that complement the prenuptial agreement early on.
Contact Our Florida Family Law Attorneys to Find Out More
If you have any questions about prenuptial agreements and what is required to ensure that your wishes and goals are compliant with the law, contact our Orlando prenuptial agreement attorneys at the Arwani Law Firm, PLLC today to find out how we can help.