Friday, June 1, 2012
A person who is a policy holder might want to consider updating their beneficiary designation forms after a significant life event or a change in circumstances. It is important to remember that beneficiary designation forms overrule any other estate planning documents, and ultimately control the disposition of the property subject to the beneficiary designation form.
An example of this is the Kennedy Case. In that case, Mr. Kennedy designated his wife as the beneficiary under his saving and investment plan. Mr. Kennedy and his wife divorced, and he failed to alter his beneficiary designation form before he died. Ms. Kennedy died shortly afterwards, and so the administrator of plan transferred the funds to her estate. In Kennedy, Executrix v. Plan Administrator of the DuPont Savings and Investment Plan, the Supreme Court upheld a beneficiary designation against a challenge by the executrix of Mr. Kennedy's estate to invalidate the beneficiary designation form.
See David M. Watts, Jr., Have You Checked Your Beneficiary Designations Recently?, JDSupra, Apr. 25, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.