The participant had named his children as his beneficiaries. He married and died a month later, but didn't change his beneficiary form. We think the new spouse is in favor of having the benefit paid to the children, but it seems that we are required to pay her. Any way we can pay the children?

Does the plan define spouse?
Still an active employee at date of death?

The new spouse can disclaim the benefit if it is payable to her, then the next generation of beneficiary would receive. But check plan terms.

Also check the rule that they must be married for a year before the new spouse becomes automatic!

I don't see the one year rule in our plan. I was looking for that, but I guess it isn't there.

The plan terms show that if there is not a beneficiary, it goes to spouse first, children second. I'm assuming you are saying that we should get an attorney to write up the disclaimer? I just want to make sure it will hold up in court.

Does the plan permit waiver/disclaimer of benefits? See Kennedy v Plan Administrator of DuPont Savings and Investment Plan decided by the Supreme Court on January 26, 2009 for discussion.