Brian Gallagher
Aug 20 2004, 01:52 PM
A participant requests a loan and indicates she is single on application, and it goes thru.
Now we find out that she really is married (but separated).
What kind of correction needs to be made?
Is the loan void? Do we just get consent after the fact?
Any thoughts would be appreciated.
Grabitquick
Aug 20 2004, 02:53 PM
See Treas. Reg. 1.401(a)-20, Q & A's 24 and 27. Assuming that the plan's terms set forth the exceptions to the spousal consent requirements contained in Q & A 27 (or at least reference them), AND assuming that the participant has a judgment of legal separation, it appears that you do not need spousal consent to the loan.