Andrew L. Oringer and Albert Feuer have made available their article, “In the Pursuit of Domestic Tranquility – Matrimonial Attorneys Should Follow the Bouncing Beneficiary Designations,” published at  43 Comp. Plan. J. 43 (March 6, 2015).  The Abstract reads as follows:

The Supreme Court, in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009) identified the “plan documents” rule (the “Plan Documents Rule”) as the legal doctrine that controls the inquiry regarding beneficiary identification for ERISA plans. The Plan Documents Rule presents an extremely bright-line standard. Generally, the inquiry starts and stops with determining who is designated as the applicable beneficiary under and in accordance with the governing plan. However, Kennedy, in a footnote, raised a question as to whether a claimant may have a cause of action against a person to whom the plan paid benefits in accordance with the governing plan documents.

This article reviews the Court’s Kennedy approach, discusses the approach taken in various post-Kennedy cases, and show how the Plan Document Rule may pose a trap for the unwary. If the beneficiary designation under an ERISA-governed plan is inconsistent with other domestic-relations documents, or otherwise inconsistent with the parties’ apparent intent, the beneficiary designation will nevertheless govern the plan’s benefit payment obligation. However, there may be litigation and disputes about whether the plan’s designated beneficiary is entitled to retain the benefit amounts received from the ERISA plan. Further, such disputes may arise for an ERISA plan that is a pension plan, a life-insurance plan, or some other type of plan, or whether the plan terms include a revocation upon divorce provision.

Fortunately, the Plan Documents Rule also provides a clear path to accuracy and certainty for a plan participant and all parties affected by the participant’s marital dissolution. Domestic-relations attorneys can do so by (i) consulting with their clients, (ii) ascertaining the intent of the clients and drafting the applicable dissolution documentation reflecting that intent, and (iii) critically, consulting with their clients so that the plan participant ultimately submits post-dissolution beneficiary designations consistent with the intended terms of the dissolution.

Download full article at In the Pursuit of Domestic Tranquility – Matrimonial Attorneys Should Follow the Bouncing Beneficiary Designations by Andrew L. Oringer, Albert Feuer :: SSRN.


Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.