Beneficiary Change Valid Despite Disappearing Form

December 2, 2008 (PLANSPONSOR.com) - A deceased life insurance plan participant's designation of her daughter as a beneficiary was valid and the daughter is entitled to the policy's proceeds even though the plan administrator never received the designation form, a judge has ruled.

U.S. District Judge Eldon E. Fallon of the U.S. District Court for the Eastern District of Louisiana said the fact that participantVirginia Clocksin had taken the proper steps before her February 2007 death meant that she had substantially complied with plan rules governing beneficiary designation changes.

Even though the designation change was never received by the plan administrator, the court said the participant's intent was clear in that she took several positive actions to effect the change, including telling several people about the change, and actually filling out the change form.

According to Fallon's ruling, Clocksin told her attorney, a friend, and her daughter that she intended to change her life insurance policy designation from her ex-husband to the daughter, filled out the proper form, and gave it to the daughter to mail. Although the daughter,Jini Linn Clocksin Cass, mailed the beneficiary designation change form, the administrator never received it.

The case is Cass v. Allstate Insurance Co., E.D. La., No. 07-4125, 11/12/08.

Fred Schneyer
editors@plansponsor.com