Retirement plan proceeds and wills

In the United States of America, the Supreme Court has made a very interesting ruling on a case, where retirement plan proceeds, went to the deceased’s ex-wife. But to understand how this came to pass here are the details of the case:

It seems that Mr W Kennedy, was saving regularly in his employer’s SIP – savings investment plan. Mr Kennedy had the power to name a beneficiary that would get his savings proceeds, after his death. The named beneficiary could also be revoked or replaced as agreed with the plan’s administrator.

Later on Mr Kennedy got married, and named his new wife sole beneficiary. The marriage did not last, and the divorce document stripped away the wife of her interest in her husband’s SIP profits.

When Mr Kennedy died, his daughter and executor of his estate, requested for the SIP money to be transferred to the estate. The plan administrator however, acted on the appointment Mr Kennedy had signed, and gave the funds to his now ex wife.
A grievance was obviously filed, contending that the x wife had waived her rights to the SIP funds. The district court ruled that the funds should be paid to the estate and that the administrator and the company were in breach of law. The ruling however was later reversed by a higher court, stating that Mrs Kennedy’s surrender was separation of her interest in the funds within the estate that was barred by legal section 1056d 1.

The administrator is in duty to always act by the documents that are signed by the SIP saver.