Eighth Circuit: ERISA Plan Beneficiary Designation Trumps Will

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Tulio D. Chirinos, Esq.

Proskauer Rose LLP, New Orleans, LA

The Eighth Circuit held that the named beneficiary of an
ERISA-governed life insurance policy was entitled to the proceeds
even though the decedent's will named a different beneficiary.
Hall v. Metro. Life Ins. Co., No. 13-1332, 2014 BL 128209
(8th Cir. May 8, 2014). Dennis Hall, the decedent, while employed,
obtained a life insurance policy issued by MetLife and named his
son, Dennis Hall II, as the sole beneficiary. Hall subsequently
married Jane Hall but never added her as a beneficiary of the life
insurance plan.  Although he completed and signed a
beneficiary-designation form naming Jane as the sole beneficiary,
he never submitted the form to MetLife.  After being informed
that he had little time to live, Hall executed a will stating that
all life insurance and benefits should be distributed to Jane Marie
Hall. Hall died shortly thereafter.

Jane Hall filed a claim with MetLife for the life insurance
benefits based on the terms of Dennis Hall's will.  MetLife
denied her claim and distributed the life insurance proceeds to
Dennis Hall II as the sole beneficiary. The court determined that
MetLife reasonably concluded that the will was inadequate to effect
a change in beneficiary because the will only addressed life
insurance proceeds that were the property of the estate and the
estate was not a beneficiary of the life insurance policy. The
court also found that the beneficiary-designation form that Hall
signed but never submitted did not satisfy the plan's requirement
because it was not submitted within 30 days of being signed. In so
ruling, the court rejected Jane Hall's argument that the 30-day
requirement was not valid because it did not appear in the summary
plan description. The court reasoned that an unambiguous provision
in the plan document prevails over a silent SPD. The court also
rejected Jane Hall's argument that the federal common law doctrine
of substantial compliance effected a change of beneficiary.

Proskauer's Perspective: The Eighth Circuit's ruling is
consistent with well-established principles including that valid
ERISA plan beneficiary designation forms control the distribution
of plan benefits; and the terms of the plan document are
controlling.

For more information, in the Tax Management Portfolios, see
Wagner, 374 T.M.
, ERISA - Litigation, Procedure, Preemption
and Other Title I Issues.

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