Life and Death Planning for Retirement Benefits

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176 Life and Death Planning for Retirement Benefits
 Waiver of the QJSA benefit must occur not more than 90 days prior to the annuity starting
date, so it is impossible to lock in spousal consent far in advance.
 REA rights cannot be waived in a prenuptial agreement, because the employee’s affianced
is not at that point the “spouse,” even if the agreement is executed within the applicable
election period. Reg. A-28. A prenuptial agreement can, however, settle the
parties’ rights with respect to division of retirement benefit in case of divorce, because
REA does not provide any spousal rights in the benefits in case of divorce (that subject
being left to the divorce court).
 “No consent is valid unless the participant has received a general description of the
material features, and an explanation of the relative values of, the optional forms of benefit
available under the plan in a manner which would satisfy the notice requirements of section
417(a)(3).” Reg. Although this disclosure must be provided to the
participant rather than to the spouse, the spouse’s consent to the participant’s waiver of the
QJSA or QPSA must “acknowledge the effect” of the election. This
probably means that the spouse should see the same disclosures provided to the participant,
in order that the spouse may understand the effect of the waiver.
 An election in proper form “designates a beneficiary (or a form of benefits) which may not
be changed without spousal consent (or the consent of the spouse expressly permits
designations by the participant without any requirement of further consent by the spouse),
and...the spouse’s consent acknowledges the effect of such election and is witnessed by a
plan representative or a notary public ....” See Reg. A-31,
for more on the form of spousal consent.
 If the spouse consents to the participant’s naming a trust as beneficiary, later amendments
to the trust do not require a subsequent spousal consent. Reg. A-31(a).
3.4.07 Spousal waiver or consent: Transfer tax aspects
Would a surviving spouse’s waiver of REA benefits, after the participant’s death, be
considered a disclaimer? And, if it is a disclaimer, is it a “qualified” disclaimer if the spouse’s
rights “vested” in her before the participant’s death, so that the disclaimer is “too late” if made
more than nine months after such vesting? See regarding the deadline for a qualified
disclaimer.
There is no concern about possible gift tax implications of a spousal waiver before the
participant’s death, because § 2503(f) provides that, “If any individual waives, before the death of
a participant, any survivor benefit, or right to such benefit, under or 417 [“REA”
benefits, in other words], such waiver shall not be treated as a transfer of property by gift for
purposes of this chapter” (emphasis added). This gift tax exemption for lifetime spousal waivers
or REA benefits seems to suggest that:
 Spousal waivers of REA-guaranteed benefits after the participant’s death could be treated
as a gift-taxable transfers. However, GCM 39858 (which was issued in 1989, though it is
inexplicably dated 9/9/81) negated this suggestion, stating that creates “no
inference” that Congress intended to impose gift tax on spousal waivers that occur after