Tuesday, March 22, 2011 NEET Tips
NEET Tips answers questions posed online to the NEET website
Can beneficiary designations be overruled by a new will?
No, properly completed beneficiary designations always override a previous or subsequently written will because beneficiary designations are part of a contract between the financial institution and the account owner. A will, on the other hand, is not a contract and may not override beneficiary designations. This was recently reaffirmed in a Supreme Court case, Kennedy v. Plan Administrator for DuPont Savings and Investment Plan. In this case, the Supreme Court unanimously ruled that the failure of an account owner to update a beneficiary designation after his divorce meant that his pension plan passed to his ex-wife, not his daughter, even though the ex-wife had agreed in the divorce decree to forfeit all right, title, interest and claim to the husband’s pension plan. Because the pension plan named the wife as primary beneficiary at the time of the husband’s death, the wife received the pension sum.
For more information on Beneficiary Designations, see the articles:
Why Beneficiary Designations are So Important
Beneficiary Designations Are the Final Word |