Plan Document Trumps Antenuptial Agreement

Citing a ruling by the 6th US Circuit Court of Appeals, Judge John Heyburn III wrote in his opinion that the plan administrator, law firm Greenebaum Doll & McDonald, should only refer to the plan documents when deciding a beneficiary.

“If the plan administrator does not receive a proper designation naming a non-spouse beneficiary and reflecting spousal consent, the pertinent provisions of the Plan designate the participant’s widow as the beneficiary,” Heyburn wrote. He further stated that the provisions of the plan were in line with the requirements of the Employee Retirement Income Security Act (ERISA).

The court said waiving the right to plan assets in an antenuptial agreement does not satisfy the plan’s requirement for designation of a new beneficiary under the plan, or spousal consent to name a beneficiary other than the surviving spouse.

The dispute over retirement benefits in this case was between Debbie Sandler, the surviving spouse of David Sandler, and his two children from a prior marriage.

The children brought a cross claim against Debbie Sandler, alleging breach of contract and seeking damages in the amount of the assets of their father’s retirement benefits account, or for specific performance of Debbie Sandler’s contractual obligation to “execute the documentation verifying and confirming her agreement” to waive her rights in her deceased husband’s account.

The court said there was no evidence that David Sandler had asked his wife to consent to changing the plan beneficiary.

The case is Greenebaum Doll & McDonald v. Sandler, W.D. Ky., No. 3:05CV-754-H, October 24, 2006.