U.S. Supreme Court Weighs in on Beneficiary Issues in Savings and Investment Plans
Adam S. Bernick, Esq. on 11/10/2009
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Law Offices of Adam S. Bernick
What happens when an individual never removed his divorced spouse as a beneficiary of his employer’s Savings and Investment Plan (SIP) and then dies? The recent U. S. Supreme Court case of Kennedy v. DuPont, 129 S.Ct. 865, 172 L.Ed.2d 662 (1/26/2009) answered this question in a unanimous decision authored by Justice Souter. The Court determined the plan document controlled what happened to the benefits. If the plan document stipulated release of the money to the divorced spouse, regardless of a non-QDRO divorce decree directing otherwise, because the decedent neglected to change the designated beneficiary from the now divorced spouse to another individual, then the plan administrators acted correctly when they released the money to the divorced spouse and not to the estate.
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