Wednesday, January 28, 2009

US Supreme Court Rules on Beneficiary Forms

The U.S. Supreme Court said in an opinion issued January 26, 2009, (Kari Ellen Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, et al., No. 07-636, U.S. Sup.) that a plan administrator correctly ignored a divorce decree and distributed the assets to the person named on the beneficiary form....the decedant's ex-wife.

The case involved the daughter of the decedent, who sued her mother because the mother was listed as the sole beneficiary of the father's 401k account. Even though he had divorced the mother, the mother's name was never removed from the beneficiary form. The daughter claimed that her mother waived her right to the account balance by the terms of the divorce decree, however, the US Supreme Court disagreed.

As I always tell my clients, a will does not trump a beneficiary form. The best practice is to review those forms regularly, making sure they reflect your wishes and are up to date.

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