Are you the beneficiary of your ex-spouse’s retirement plan or life insurance?
If so, you might be able to claim the benefits even though the divorce has been finalized. In 2009 the Supreme Court issued an opinion in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan addressing beneficiary designations on retirement plans and life insurance policies and the effect of a divorce on such designations. 555 U.S. 285, 129 S.Ct. 865, 172 L.Ed.2d 662 (2009). Ultimately, the Court ruled that DuPont had a duty under ERISA to follow the savings and investment plan’s (SIP) beneficiary designation even if the waiver incorporated into the divorce decree was conflicting. This is often referred to as the plan documents rule. The Court’s reasons for applying the plan documents rule is for a “straightforward rule of hewing to the directives of the plan documents” and has virtues of “simple administration, avoiding double liability, and ensuring that beneficiaries get what’s coming quickly, without the folderol essential under less-certain rules.” Id. at 857-76.
In 2010, the Court in Matschiner v. Hartford Life and Accident Insurance Company stated that a plan administrator was required to pay ERISA life insurance plan proceeds pursuant to the beneficiary designation form signed by the participant designating the former husband as beneficiary, rather than follow the divorce decree, which divested former husband of his beneficiary rights to the life insurance proceeds, where the plan provided that the beneficiary designation form controlled. 622 F.3d 885. (8th Cir.2010).
Of course, with every rule, there are always exceptions and pitfalls that you must avoid. That is why it is important to get an attorney involved early in your case to preserve your rights. One such exception deals with qualified domestic relation orders, commonly referred to as a QDRO. By speaking with an experienced attorney you can prepare for the potential pitfalls.
If the ERISA plan administrator is stating that your divorce removed you as the beneficiary on a life insurance policy or retirement account, it is important you contact an attorney immediately to protect your rights.