If a married worker desires to have her pension go
to someone other than her spouse, she should not rely solely on a
premarital agreement to accomplish that goal. This point is
illustrated in the Federal Fourth Circuit Court of Appeals case of
Hagwood v. Newton decided on February 26, 2002.
In that case Toni Odom and Charles Newton had
signed a premarital agreement in which they agreed, among other
things, that any employee savings plans and retirement accounts that
they had prior to the marriage remained as separate property and
neither of them were to obtain any rights in that property of the
other by virtue of the marriage.
Unfortunately, Odom became ill and died
approximately two years after the marriage. Newton during her illness
used a Power of Attorney from her to designate himself as a
beneficiary on her employer's pension plans that were regulated by
ERISA. Odom's Estate and her father sued Newton to give effect to the
intent evidenced by the premarital agreement to have Odom's property
distributed to her Estate as her separate property and to reverse
Newton's actions in designating himself as the beneficiary of Odom's
ESOP and SSP. The Fourth Circuit Court of Appeals found that even
without Newton having designated himself as the beneficiary of these
pension plans, under ERISA as the surviving spouse he would receive a
survivor annuity.
For a spouse to waive the surviving spouse rights
under ERISA, the spouse of the worker must, among other things,
consent in writing. While Newton certainly evidenced in writing
through the premarital agreement his intent to waive survivor benefits
in Odom's pensions before he became a spouse, he did not provide such
a written waiver after he became the spouse.
While the Fourth Circuit Court does not have
jurisdiction over the New Hampshire Federal District Court, it would
be extremely prudent for a worker who becomes married and has a
pension she wishes to leave to someone other than her spouse, to
ensure that her spouse, after the marriage, makes a written election
to waive his surviving spouse's pension benefits by following all the
specific requirements of the employer's pension plan.
While in the above case Odom's and Newton's intent for such waiver
was quite clear prior to marriage, the Court found under ERISA law
that since the written election to waive was not made after Newton
became the spouse, it was of no effect. Therefore, Newton received
assets of his deceased wife, which under her premarital agreement she
expressly stated he was not to have.
