Rolling Over In His Grave -- Another Lesson in Costly Beneficiary Form Mistakes
Imagine getting divorced, thinking the law states after divorce your ex is no longer your life insurance beneficiary. You don’t name a new beneficiary thinking the payout will go to your estate.
Maybe not...
Marla Presley in her firm’s website discusses a case in Penn, decided May 9, 2008 where the Penn. Superior Court ruled that the Employee Retirement Income Security Act (“ERISA”) preempts a state law that mandated the revocation of beneficiary designation upon divorce. The gentleman had filled out the beneficiary form listing his wife as the primary and his nephew as the contingent beneficiary. After his divorce he never changed the form. The ex got it all. Probably not the result that was intended.
Beneficiary designation forms are an often overlooked area of estate planning that can have dire consequences if not taken care of. I represented one person in a case where the beneficiary form was executed, put in an envelope, but never mailed. It became an expensive stamp.
