Unexecuted Prenup Still Means Widow Gets Retirement Assets

December 5, 2007 (PLANSPONSOR.COM) - Because the wife of a law firm employee never executed documents waiving her claim to her husband's retirement plan savings, she should now receive those funds, a federal appellate court has ruled.

The 6 th U.S. Circuit Court of Appeals decided that Debbie Sandler should be awarded the retirement plan assets even though she and husband David had signed a prenuptial agreement in which she gave up rights to the money.

Because the agreement’s required execution documents were never signed, the appellate panel asserted, the plan’s default beneficiary designation of a participant’s spouse would control the issue.

Not only that, the appellate judges pointed out, but the prenuptial agreement provided that the wife would get the retirement assets if the couple was still married when the participant died – as was the case with the Sandlers.

According to the ruling, David Sandler’s plan at the Greenebaum Doll & McDonald law firm allowed for the participant to designate a beneficiary other than a spouse only if the participant’s spouse consented in writing to a specific beneficiary.

The appellate opinion said Debbie Sandler left her husband in May 2005 – three days before he committed suicide, according to the court.

A legal dispute soon developed between Debbie Sandler and David Sandler’s children from a previous marriage, who claimed she had given up her rights to the money.

The law firm took the matter to a federal judge who ruled in favor of Debbie Sandler – a decision affirmed by the appellate ruling.

“The children, as an initial matter, concede that the prenuptial agreement fails to meet ERISA’s requirements–and with good reason. There is little support for the notion that a prenuptial agreement by itself can satisfy ERISA’s spousal-consent requirement,” Circuit Judge Jeffrey S. Sutton wrote for the court.

The ruling in Greenebaum Doll & McDonald PLLC v. Sandler, 6th Cir., No. 06-6494, unpublished 12/3/07 is  here .