Lynn Brenner's Family Finance

Can I Inherit My Ex-Husband's 401(k)? He Was Murdered by His Girlfriend and His Parents -- Who Hate Me -- Have Inherited His Estate

Q:  I desperately need some advice! My ex-husband has recently been murdered by his live-in girlfriend. He and I stayed in touch and were friends, even though I remarried. He told me about a year ago that I was still his 401(k) beneficiary.

My ex's family are very wealthy, and they hate my guts. They have taken total control of his estate. I believe that given the opportunity, my ex mother-in-law would contest anything coming to me. She even told lies about me at the funeral when I was just a few feet away.

What do I need to do now? Should I wait to see if the company holding the 401(k) retirement account finds me? I now have a different last name and address, but my Social Security number matches my newly married name and new address. 

I do not know the name of the 401(k) company any longer, as I threw the papers out post-divorce thinking I did not need them anymore. Nor do you think a 40 year-old will be dying anytime soon. I am afraid to call my ex's employer because his father also works for them and word will get around. They will turn this into something awful. But I truly could use the funds since I'm also recently unemployed. --MV via email

A:  Wow. This sounds like a combination of classic soap opera and modern reality show!

Let's start by eliminating everything that's highly dramatic, but legally irrelevant.

Your former in-laws' great wealth and intense dislike of you, your former mother-in-law's probable desire to rob you of an inheritance, the fact that your former father-in-law works for the same company as your ex, your recent unemployment and need for the money -- none of this has any bearing on your legal situation.

There would be nothing inappropriate or unseemly about your calling or writing to your ex-husband's employer and asking if you are the designated beneficiary on his 401(k) account.

But it isn't necessary. Based on what you say, all you need to do is sit tight. If you're still listed as your ex-husband's designated 401(k) beneficiary, your Social Security number is all the plan administrator will need to find you.

Here are the facts that are legally relevant:

1. Your ex-husband didn't remarry. If he had remarried, his new wife would be legally entitled to be his 401(k) beneficiary.

What happens when a 401(k) plan participant remarries, but his beneficiary designation form still lists his ex-wife? "Then the beneficiary designation form is canceled, and the participant's account is paid to his current wife," says Robyn Credico, an employee benefits expert at Towers Watson in New York City.

But if your ex was unmarried and you're still listed as his beneficiary, you are entitled to the account. This would be true even if his death had been accidental and had left his live-in girlfriend emotionally and financially devastated.

That's a cautionary note for others, to put it mildly!  Many people who are divorced don't get around to changing their retirement account paperwork, especially on accounts still sitting in a former employer's plan; like you, they don't think a 40 year-old can die anytime soon. If you're divorced and living with a new partner, don't assume that he or she will automatically inherit your retirement account. Keep your beneficiary designations up to date!! (And keep your divorce papers. That's what safe deposit boxes are for.)

2. A 401(k) plan designation is not subject to legal challenge by the decedent's parents.

From what you say, it sounds as if your ex had no will. When you die without a will, the state's intestacy law dictates who gets your estate -- and in many states, when you die unmarried and childless, the law says your estate goes to your parents.

But the intestacy law applies only to assets that would have passed through your will if you'd had one. It doesn't apply to assets that pass 'by operation of law' -- i.e., assets that have designated beneficiaries or are jointly owned with right of survivorship.

In other words, even if your former in-laws have inherited their son's estate and all his personal belongings, they can't contest his disposition of his 401(k) account, his life insurance policy, his 'in-trust-for' bank account, or anything that he owned jointly with right of survivorship with another person who survives him.

P.S. Yours is the second question I've received in the past four years about the distribution of a 401(k) account whose owner may have been murdered. (See my earlier post 'Police Investigate Mom's Death'.)

Please send your questions to [email protected]. I'm sorry I can't respond personally to every email. Questions are addressed only online.

(c) Lynn Brenner, All Rights Reserved.

 

Are Unmarried Partners Ever Entitled to a Spousal Social Security Benefit?

Q:  In the past, I've read that there can be Social Security benefits for an unmarried partner. We've lived together for 22 years. His divorce was finalized in March 2004, and his ex-wife has remarried. Can I apply for spousal benefits? Do I have to be a certain age? How many years post-divorce does the government require before I can be considered a legal partner able to collect benefits? --JA via email

A: You want to be sure you'll qualify for Social Security on your partner's record? Marry the guy. 

Nine months after you tie the knot, you'll be eligible for a widow's benefit in the event of your husband's death. And two years after you marry, you'll be eligible for a spousal benefit. The earliest you can collect a widow's benefit is age 60. The earliest you can collect a spousal benefit is age 62.

That said, what you read is sometimes true: You may qualify for those benefits without getting married if you happen to live in a state that recognizes 'common law' marriage, which exists without a license or a ceremony. "The Social Security Administration tends to go with the state's definition of 'spouse'," explains Linda Lauria, an agency spokeswoman in New York City.

(This does not mean that the agency recognizes same sex marriages, which are now legal in Connecticut, Maine, Massachussetts, New Hampshire, New Jersey, and Vermont. The federal 'Defense of Marriage' law specifically prohibits federal recognition of same sex marriages.)

The states that recognize 'common law' marriage are Alabama, Colorado, Georgia (if the relationship began before 1/1/97), Idaho (if the relationship began before 1/1/96), Iowa, Kansas, Montana, New Hampshire (for inheritance purposes only), Ohio (if the relationship began before 10/10/91), Oklahoma, Pennsylvania (if the relationship began before 1/1/05), Rhode Island, South Carolina, Texas, and Utah. 

But just because you've lived together for a long time doesn't mean you have a legitimate 'common law' marriage. You also must have held yourselves out as a married couple, which usually means using the same last name, referring to each other as 'my husband' and 'my wife', and filing a joint tax return.

And both of you must have been free to marry.

"If there's a legal impediment to the marriage, it isn't a valid common law marriage," says Lauria. In your case, of course, there was an impediment for many years: your partner's ex-wife. So no matter where you live, you can only have had a common-law marriage since 2004.

Please send your questions to [email protected].  I'm sorry I can't respond personally to every email. Questions are only addressed online.

(c) Lynn Brenner, All Rights Reserved

Can My Partner's Children Contest His Will?

Q: My companion and I have lived together for 12 years. We purchased a house together. He has made me the beneficiary of his retirement account and an insurance policy. His will states that I am the executor of his estate and leaves everything to me.

He has three grown children, two of whom have can't seem to get their lives in order. I've decided to stop being involved with their situations, since it gets quite frustrating.  My companion doesn't want to listen to it either, but he won't tell them that, for fear they'd stop seeing him.

Since we're not legally married, do I have a leg to stand on as far as our possessions? For example, last year he bought me a new car as a birthday present, but the title and registration are in his name.  If his children contest the will, do they get half of all our possessions? -- MD, New York

 

A: Take it easy. It’s harder than you think to get a will overturned.

Yes, your partner's kids can contest his will, since they'd be his heirs if it didn't exist. (For what they'd have to prove to get it invalidated, click here. )

For the sake of argument, let's say they convince a court to throw out the will.

They could then inherit 100% of the assets that are solely in his name.  But anything that you and your partner owned jointly with right of survivorship -- like your house, for example -- would be totally protected.

Jointly owned assets automatically go to the surviving joint owner whether or not there’s a will.  That’s also true for any account that has a named beneficiary: IRAs, 401(k) plans, life insurance policies and annuities all automatically go to the named beneficiary.

The car in your partner's name is a different matter.

"If there's a fight over the car, you may lose," says Stephen J. Silverberg, an estate lawyer in East Meadow New York. Under New York law, a surviving child can transfer a car worth $14,000 or less into his or her own name with nothing more than the title and a copy of the death certificate.

What about other gifts?

As a general rule, whether or not an item was a gift is largely matter of donor's intention – and the burden of proving that intention is on the person who claims it was a gift. "If I gave you a $1,000 check, was it a gift or a loan? Unless you can prove otherwise, the law assumes it's a loan," Silverberg says. "Did I write ‘gift' in the lower left corner of the check? Did I write you a note, 'Here's a thousand bucks I want to give you'?"

But even in the absence of documentary proof, your longstanding relationship would give some weight to your claim to household furnishings and other possessions: "If two people live together for 12 years, that implies some intent even if they aren’t married," says Silverberg.

His advice: You and your partner should document your intentions by writing a letter, addressed to his kids and all your other relatives, stating that you love each other and have chosen your belongings together, and that everything belongs jointly to both of you. Sign the letter, and keep it with your wills, with instructions that it be opened after your deaths.