Court: Participant's Will Can Be Beneficiary Designation.

February 13, 2004 ( - A federal appeals court has upheld a lower court's ruling that the will of a life insurance plan participant can effectively serve as a beneficiary designation.

>The US 11th Circuit Court of Appeals agreed with the trial court’s conclusion that enforcing the participant’s will as a beneficiary designation was not improper because the court was simply enforcing the plan’s terms

>Appeals judges issued their ruling based on an appeal by Barbara Kennedy, the second wife of Clint Kennedy, from a dispute between Barbara Kennedy and Clint Kennedy’s third wife Mary Beth over $1.3 million in life insurance proceeds. The insurance came from an insurance program offered by Clint Kennedy’s employer, Georgia Pacific Corp. for whom Kennedy worked for more than 25 years, according to the appeals ruling.

>Before Clint Kennedy divorced his second wife, Barbara Kennedy was named as his sole beneficiary; he failed to change the designation after the divorce, the ruling indicated. After he married Mary Beth Kennedy, he executed a will in which he left 25% of his life insurance benefits to his third wife and 18.75% to each of his four children. He died in October 2000 when he was crushed as an all-terrain vehicle fell off a truck and onto him.

>The trial court, a federal judge in the US District Court for the Northern District of Georgia, found that the plan’s summary plan description (SPD) contained conflicting language requiring beneficiary changes to be made on a particular form, but that the life insurance policy controlled the situation. The lower court judge ruled that there was no evidence that Clint Kennedy had relied on the SPD’s beneficiary change provisions.

The case is Liberty Life Assur. Co. v. Kennedy, 2004 U.S. App. LEXIS 1675 (11th Cir. 2004). The appeals ruling is available at .