Founder and President Sigma6 HR Benefits, ZappHR, Jaca Publishing, and Commonwealth Alliance Insurance Group
Long-Forgotten Beneficiary Form Gave An Ex-Wife More than $1Million Beneficiary forms are often completed upon a new hire, an open enrollment, or some other one-time change--- and then forgotten. How important is a beneficiary form?? Here’s a real-life story I read recently in the Wall Street Journal. A man and his girlfriend were dating some years ago, when he listed her as a sole beneficiary on a retirement account. The couple later broke up and married other people, but the beneficiary form was never updated. 40 years later the man died. As a result that the beneficiary form had never been updated, the old girlfriend was awarded the benefit of $1.15 million. Of course, the man’s estate is suing the former girlfriend, insurance carrier and the company in federal court. However, under federal law, employers and insurance companies are required to pay out retirement accounts, and life insurance policies to the last recorded beneficiary. The moral is that companies should be sure to have their employees offered a periodic opportunity to complete an updated beneficiary form. For more details, contact us at sigma6hr.com, [email protected], or 502-292-2980.
