Divorce related cases don’t often make it to the United States Supreme Court but Kennedy vs. Plan Administrator for Dupont Saving and Investment Plan did! It is a important reminder to follow up the actions taken in a divorce.The Supreme Court stated in its syllabus that "The decedent, William Kennedy, participated in his employer’s savings and investment plan (SIP), with power both to designate a beneficiary to receive the funds upon his death and to replace or revoke that designation as prescribed by the plan administrator. Under the terms of the plan, if there is no surviving spouse or designated beneficiary at the time of death, distribution is made as directed by the estate’s executor or administrator. Upon their marriage, William designated Liv Kennedy his SIP beneficiary and named no contingent beneficiary. Their subsequent divorce decree divested Liv of her interest in the SIP benefits, but William did not execute a document removing Liv as the SIP beneficiary. On William’s death, petitioner Kari Kennedy, his daughter and the executrix of his Estate, asked for the SIP funds to be distributed to the Estate, but the plan administrator relied on William’s designation form and paid them to Liv. The Estate filed suit, alleging that Liv had waived her SIP benefits in the divorce and thus respondents, the employer and the SIP plan administrator (together, DuPont), had violated ERISA by paying her. As relevant here, the District Court entered summary judgment for the Estate, ordering DuPont to pay the benefits to the Estate. The Fifth Circuit reversed, holding that
Liv’s waiver was an assignment or alienation of her interest to the Estate barred by §1056(d)(1)
Held:
Because Liv did not attempt to direct her interest in the SIPbenefits to the Estate or any other potential beneficiary, her waiver did not constitute an assignment or alienation rendered void under §1056(d)(1)."
You can read the entire opinion at
http://www.supremecourtus.gov/opinions/08pdf/07-636.pdf
If you don’t want these results make sure you follow up what you agreed to in your divorce.
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