Pension Interests at Death

Under federal law, specifically ERISA, a nonemployee spouse can only pass on their community interest in a pension through a will if the pension plan allows it. This means that the terms of the pension plan and federal rules take precedence over state laws regarding inheritance.

A husband and wife have been married for 20 years, and during that time, the husband accrued a pension. Upon his death, the husband’s will states that his wife can inherit his entire pension. However, the pension plan requires that the husband name his wife as a beneficiary for her to receive any benefits. Since he did not do so, she cannot inherit the pension despite the will's provisions.

ERISA rules over state wills when it comes to pension interests.

Exams may present scenarios where a spouse believes they can inherit a pension based solely on a will, ignoring the plan's requirements. Students might overlook the significance of ERISA regulations in these situations.

Questions often involve a fact pattern where a spouse attempts to transfer pension benefits through a will, requiring candidates to identify the conflict between state law and ERISA.