Two recent cases are instructive when it comes to determining the validity of beneficiary designations. In the first case, two individuals claimed they were the designated beneficiary of a decedent in a life insurance plan and were thus entitled to the death benefits. Those individuals were the decedent’s wife at the time of his death and his ex-wife. In February 2007, the decedent indicated he wanted to change his primary beneficiary to his new wife, and he sent the executed form to the employer’s designated agent. The form, however, was never sent to the carrier that issued the life policy. On the decedent’s death in April 2007, the carrier received competing claims from the ex-wife and the wife. When the carrier told the wife that the carrier’s records named another person, the ex-wife, as the beneficiary, the wife sent the carrier a copy of the February 2007 beneficiary change form. The insurance carrier initiated the case seeking a determination as to who was entitled to the death benefits. The plan, in this case, specifically stated that a participant may change a named beneficiary by sending a written request to the carrier, that the change will not be effective until recorded by the carrier, and that, once recorded, the change will apply as of the date the request was signed. The ex-wife argued she was the beneficiary on the carrier’s records at the time of the decedent’s death, and the recorded beneficiary had never been changed on the carrier’s records. The court ruled the ex-wife’s contention that she is entitled to the insurance proceeds because she was the beneficiary on the carrier’s records at the time of the decedent’s death was without merit. The plan clearly stated that once the carrier records the change, it “will apply as of the date the request was signed.” The fact that the ex-wife was the beneficiary of record at the time the decedent died was not determinative. (Principal Life Insurance Company v. Smith, 11th Cir., 2010)

In the second case, a lawsuit was initiated by the decedent’s wife (the plaintiff) to recover life insurance benefits after those benefits were paid to a woman the decedent designated by name as his beneficiary. The decedent and the plaintiff were never formally divorced, but the decedent still was “remarried.” After he was “remarried,” the decedent named his second “wife” as the beneficiary of his life insurance benefit. Because the first marriage was never formally dissolved, the second marriage was null and void. The plaintiff claimed she was entitled to the life insurance proceeds and, in so doing, argued that the beneficiary designation naming the second “wife” was defective because the second “wife” was identified as the decedent’s spouse when in fact she was never legally married to the decedent. The court upheld the determination of the carrier that the second “wife” was the proper beneficiary. The court ruled that it must defer to the carrier’s determination that the second “wife” was the proper beneficiary, unless that decision was arbitrary and capricious based on the information that the carrier had at the time it made the decision. In the end, the court concluded that the plaintiff failed to produce any evidence from which a reasonable fact finder could conclude the carrier was arbitrary and capricious in determining the decedent properly designated the second “wife” as the beneficiary. (Bayer v. Fluor Corp., et. al., E.D. Pa., 2010)