In 2009, DuPont was sued by the estate of a deceased employee for retirement plan benefits that the company had distributed to the deceased’s ex-wife upon the employee’s death. Although the ex-wife allegedly waived her rights to the benefits, DuPont had honored the deceased employee’s retirement plan beneficiary designations–which were never updated–that listed his ex-wife as the beneficiary.
DuPont was ordered by a U.S. District Court to pay the retirement benefits to the employee’s estate, but that decision was later overturned by a U.S. Court of Appeals after the ex-wife appealed in response to the former court’s ruling, claiming she had not waived her rights to the benefits. DuPont then appealed to the Supreme Court, who ruled that that DuPont was obligated under ERISA (Employee Retirement Income Security Act) to distribute the retirement benefits to the deceased employee’s ex-wife. The Supreme Court also had stated that the deceased could have easily changed his beneficiary designation but chose not to.
The outcome of this case is unfortunate for the estate of the deceased, who may have wanted his retirement benefits to go to his daughter, who was the executor of his estate. This case is a somber lesson of why you must make it a habit to review your estate plan with a qualified elder law attorney on a regular basis is to make sure your designated retirement plan beneficiaries remain up to date and are modified whenever a major life change occurs, like children, marriage or divorce.
