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Avoiding Beneficiary Befuddlement

April 13, 2017

Authors

Richard Arenburg and Jennifer Stokes

Avoiding Beneficiary Befuddlement

April 13, 2017

by: Richard Arenburg and Jennifer Stokes

Challenges AheadRetirement plans are complicated creatures to administer so it perhaps is not surprising that the process of determining the beneficiary of a deceased participant can present its own set of challenges and, if things go awry, expose a plan to paying twice for the same benefit.

These risks were recently highlighted in an 11th Circuit Court of Appeals decision decided in the aftermath of the Supreme Court case of Kennedy v. Plan Administrator for DuPont Savings and Investment Plan.  In that 2009 decision, the Supreme Court ruled that a beneficiary designation naming a spouse had to be given effect even though the spouse had subsequently waived her interest in any of her husband’s retirement benefits in a divorce agreement.

In the 11th Circuit case, Ruiz v. Publix Super Markets, the question was

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“Slayer Statute” Options for Plan Administrators

February 22, 2013

Authors

benefitsbclp

“Slayer Statute” Options for Plan Administrators

February 22, 2013

by: benefitsbclp

One of the sadder tasks encountered by a plan administrator is sorting out who is the appropriate recipient of benefits when a participant has been murdered by the intended beneficiary of such benefits.  Over time, we have advised many plan administrators in handling situations like this one dealing with their pension, 401(k), life insurance and accidental death plans and, in doing so, have developed a variety of alternatives each with varying levels of cost and risk.   These alternatives, each of which is summarized in more detail below, include: (1) commencing an interpleader action, (2) securing a receipt, release, and refunding agreement, and (3) obtaining an affidavit of status (e.g., heirship).

In arriving at these alternatives, we have considered applicable law, including state statutes and ERISA preemption.  Most individual states have enacted so-called “slayer” statutes, which generally provide that an individual who kills the decedent

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