Tuesday, August 4, 2015
When Austin Hardy died, he left behind a retirement plan that was administered by his employer but did not have a named death beneficiary. As a result, his employer followed the plan's procedure and transferred the proceeds to Hardy's biological daughter. However, Hardy's sisters challenged the distribution arguing that since his daughter had been adopted by her stepfather, she was no longer his child under the plan rules.
In Lubin v. AT&T Ret. Savings Plan, the district court ruled that the distribution was proper since the plan guidelines call for any surviving child, be it biological or adopted, to inherit if no surviving spouse or partner existed. The sister's argument that the daughter being adopted stripped her of her child status was not supported by any authority and would require reading words into an express agreement that was unambiguous. This case serves as an reminder that the holder of a retirement account should always name a beneficiary, as well as keeping the name up to date, in order to prevent grasping relations from claiming inheritance rights that were never intended to be theirs.
Special thanks to Naomi Cahn for bringing this case to my attention.