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Can A Prenuptial Agreement Override The Requirements Of Laws Such As the Employee Retirement Income Security Act (ERISA)?

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Prenuptial agreements are an important part of providing security for a number of individuals and couples contemplating marriage, especially if there are children from previous families and concerns property division expectations, for example. However, it is important to note that prenuptial agreements must also be in accordance with what the law dictates; for example, you cannot do away with child support in a prenuptial agreement because the law dictates that financial support in general is in the best interest of a child.

Many people may not realize this, but the law also applies when it comes to addressing retirement benefits, such as a pension, in a prenuptial agreement. Specifically, because the Employee Retirement Income Security Act (ERISA) addresses employer-sponsored retirement plans and contains spousal rights provisions, this can add in some complexity in terms of prenuptial agreements also addressing these same benefits.

What ERISA Requires

ERISA specifically dictates that, when someone is married, their employer retirement plan benefits must be paid to their surviving spouse unless that spouse not only signs a waiver agreeing to a different beneficiary, but follows very specific instructions in doing so, i.e.:

  • That consent must be in writing;
  • The beneficiary that is designated cannot be changed later on without consent from the spouse; and
  • The consent must be witnessed by a notary public or plan representative.

Any plan fiduciary who authorizes payment to a non-spouse beneficiary otherwise risks facing liability under ERISA.

What Happens If the Prenuptial Conflicts with ERISA Requirements?

However, courts are split as to how they have interpreted waiver requirements. For example, while some courts have held that an individual’s spouse would still receive retirements benefits in spite of whoever is named as the beneficiary, even if they signed a prenuptial agreement that renounced the right to retirement benefits, because they must also meet the specific requirements of ERISA in order for this waiver to be considered valid, other courts have held that if a spouse agreed to permit the payment of benefits to someone else in their prenuptial agreement, that named beneficiary can bring a breach of contract action against the spouse to recover the retirement plan benefits.

Still, this would lead to a complex set of claims and competing claims and, as a result, it is simply best to work with an experienced prenuptial agreement attorney from the outset who knows that at the time a prenuptial agreement is entered into, if either or both of the parties plan on leaving their retirement benefits to someone other than their spouse, it is best to simply execute a valid ERISA waiver at that same time.

Always Work with an Experienced Prenuptial Agreement Attorney

The Orlando prenuptial agreement attorneys at Greater Orlando Family Law can not only help you draft, negotiate, and finalize your prenuptial agreement, but also ensure that everything else that is necessary in order to ensure that that prenuptial agreement is valid and accomplishes what you envision. Contact us today to find out more about our services.

Resources:

dol.gov/general/topic/retirement/erisa

news.bloomberglaw.com/employee-benefits/insight-how-a-prenup-can-trigger-a-brawl-over-retirement-benefits

https://www.orlandolegal.com/getting-engaged-consider-discussing-a-prenup/

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