401k question

[justcurious810]

What is the name of your state (only U.S. law)? SC
A friend of mine is trying to change the beneficiary of his 401k. It is kind of complicated but I will try to explain. His wife is in a nursing home with Alzheimer's and he has POA. He wants to leave it to a friend of his, but his employer and the company managing the 401k refuse to do it. They say the spouse is the beneficiary even though he had an attorney notarize and fill out a beneficiary request form. Does he have any alternative? He is very upset because he does not want the nursing home to get the money he worked 21 years to save should he die before his wife. Her care is paid for in full. Any help you can give or contact information is greatly appreciated!What is the name of your state (only U.S. law)?

[ShyCat]

Per Federal law (ERISA), a spouse is always the beneficiary of a 401(k) unless a valid waiver is signed. With Alzheimer's, obviously his wife cannot waive her rights to his 401(k).

Her care is apparently "paid in full" by the taxpayers of SC. Through Medicaid, each state's taxpayers shoulder the burden of nursing home care for indigent residents. Forgive them for being so greedy as to expect to be repaid in part if she inherits any money. In the mean time, feel free to lobby your state's legislators to raise tax rates to levels sufficient to cover all residents' future nursing home care regardless of income or assets so that no heir ever misses out on any part of their expected inheritance.

[thedoctorisin]

Is it a durable Power Of Attorney?

[url=http://www.thebody.com/content/art33010.html]How and When to Use the Durable Power-of-Attorney - The Body[/url]

[justcurious810]

Yes, it is

[thedoctorisin]

The link I gave indicated that in some states, durable powers of attorney can give the right to:

The power to renounce or disclaim an inheritance and/or insurance proceeds. This power could be another powerful estate and Medicaid planning tool where not prohibited under state law.

However, SC law states that "[t]he attorney in fact has a fiduciary relationship with the principal and is accountable and responsible as a fiduciary," so that may not include the power to renounce being a beneficiary.

[url=http://www.scstatehouse.gov/code/t62c005.htm]S.C. Code of Laws Title 62 Chapter 6, Article 6 - www.scstatehouse.gov-LPITS[/url]

Sounds like your friend needs a lawyer.

[justcurious810]

Thanks. I appreciate your help.