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Postnup Does Not Waive Spousal Rights to 401(k), 8th Cir. Says

By Aditi Mukherji, JD | Last updated on

When you sign a prenuptial or postnuptial agreement in which you agree not to be the beneficiary of a 401(k) retirement plan, does that extinguish your spousal rights to it?

To the surprise of divorced couples and family law attorneys alike, the Eighth Circuit has ruled that no, it does not extinguish your rights. You still may have a right to the 401(k).

In its decision, the appeals court ruled that a postnuptial agreement in which each party expressed "irrevocable consent" to a change of beneficiary of the other's retirement plan did not constitute a waiver of the spousal right to benefit from such plans.

3rd Time's Not the Charm

Michael Cox married his wife Kathy not once, not twice, but three times. Before taking the plunge the third time around, in 2010, they signed a postnuptial agreement 20 days after the ceremony.

The agreement stated that Kathy "agree[d] to properly execute a waiver" to Michael's retirement plan and "irrevocably consent[ed]" to the change in beneficiary. (Michael named his parents as beneficiaries.)

A mere 14 months later, they got divorced... again. [Insert your feigned shock here.]

But before the divorce was finalized, Michael passed away. Though Michael named his parents as his beneficiaries, Kathy refused to give up her spousal rights, which took the matter to court. The lower court ruled for Kathy in a summary judgment motion.


The Employee Retirement Income Security Act of 1974 is a federal law that sets forth requirements for pension plans in the private industry. A spouse is entitled to be the beneficiary, unless he or she elects to waive that right.

The question here was whether Kathy actually ever waived her rights. The bones of contention for the court were:

  • Future executions. The court found it problematic that the postnuptial agreement only "contemplated" the "future execution" of a waiver or consent to change in beneficiary. If the postnuptial agreement itself were the waiver, then provisions about "future executions" for a waiver wouldn't have been included, the court reasoned.
  • Notice and acknowledgment. ERISA requires that "the spouse's consent (to waive) acknowledges the effect of such election and is witnessed by a plan representative or a notary public." The district court held that Kathy's consent in the marital agreement did not satisfy this acknowledgement requirement, and the appeals court recently agreed. Bottom line: The agreement didn't sufficiently inform Kathy that she was waiving her right to the retirement plan, and she didn't sufficiently acknowledge the consent of waiver.

In the end, the death knell for the postnuptial agreement was that ERISA has "strict compliance requirements" for waiving spousal rights. And this agreement simply didn't follow them.

Based on the Eighth Circuit's decision, it seems the consent to waiver itself needs notice, acknowledgement and witnesses sans language contemplating future executions. The waiver can't piggyback on the notice, acknowledgment and witnesses of the executed marital agreement.

To play it safe, have a separate waiver form.

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