Once Pension Proceeds are Distributed, Restrictive ERISA Laws no Longer Apply: You Can Now Sue An Ex-Spouse for Pension Retirement Accounts and IRA Benefits (Part 1 of a 3 part series)

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Litigation Attorney

In my earlier blogs, the lesson I have tried to teach my readers is to always keep up to date their beneficiary designation to any pension plan and/or life insurance policy.  Should the beneficiary of a pension plan be an ex-spouse, even a property settlement agreement (“PSA”), incorporated into a divorce decree revoking him or her as beneficiary, is not enough to ensure that your estate gets the money over your ex-spouse.  You need to change your beneficiary designation with the plan administrator declaring your intention to give your qualified retirement funds to the estate or alternative beneficiaries.  Otherwise, the plan administrator is required under federal law to distribute your pension, etc., to your ex-spouse as the named beneficiary.  This was the United States Supreme Court’s 2009 holding in Kennedy v. Plan Administrator for DuPont Savings & Investment Plan when interpreting the Employee Retirement Income Security Act (ERISA).  But what happens after the named beneficiary/ex-spouse receives the money?  Can the estate recover the money from the ex-spouse claiming he or she waived any right to the money?  This question was tackled by the Third Circuit Court of Appeals in 2012 in a case called Estate of Kensinger v. URL Pharma, Inc. The holding applies to residency of New Jersey.

To discuss your NJ Estate Planning matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.