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Remember that Exotic dancer that received life insurance money because she was the legal beneficiary?

Hopefully, readers will remember the post I recently did about the importance of beneficiary statements?  An announcement at the practice blog today tells the following story.


Eighth Circuit: ERISA Plan Beneficiary Designation Trumps Will.



In Hall vs. Metropolitan Life Hall had a group life policy making it an ERISA life plan.  (This is where HR people need to remember this case.) Hall remarried and completed a will, naming his spouse the beneficiary of his life insurance. However, he did not apparently contact the HR department and change the beneficiary statement. On his subsequent death, the new spouse attempted to collect the life insurance proceeds. She was denied!


There are other complications and questions, but from standpoint of the HR person it would be important to be able to document that you were never aware of Hall’s intentions to make changes to his estate. In the majority of cases, HR will not be informed of changes like this because employees forget about the group life plans. But, if you are informed of a change of status on the Medical or Dental plans, you should make it policy to ask if changes need to be addressed in any other benefits that might be affected.


Employers frequently minimize the value of life plans, and employees forget about them, but these are valuable benefits that only come into play when death occurs – OR – with the anticipation of death in some cases. What would happen if an employee requested and received 50% of the death proceeds due a premature death scenario. Was the beneficiary notified? Was there any requirement to notify the beneficiary? Does that award impact an estate plan?


Employee benefits are an important component of any compensation plan, but frequently they are seen as an expensive inconvenience and not properly designed nor administered. This negates the positive impact the employer might be garnering and the real value these benefits bring to employees.


If you have questions about this subject please feel free to contact me, 602-381-9900.

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