Are your finances in order? Do you have the proper beneficiary designations in place for your retirement accounts? Ashlea Ebeling reports on an extreme example of the dangers that can arise when the details aren’t taken into account while you’re in good health. She explains in The Wall Street Journal:
Jeffrey Rolison and Margaret Sjostedt dated in the 1980s. Now, almost 40 years after they broke up, she stands to inherit his $1 million retirement account.
The reason she might get the money is that in 1987, Rolison listed Sjostedt on a handwritten form as the sole beneficiary of his workplace retirement account. He never changed the beneficiary designation and died in 2015.
Standing in her way are Rolison’s brothers, who learned about Sjostedt’s claim to the money weeks after his death on a phone call from their estate lawyer. They don’t think he could have intended to leave the money to her.
“We were shocked,” said his brother Brian, a mechanic.
The brothers have since been fighting his former employer, Procter & Gamble, in federal court to wrest the retirement money out of the hands of Sjostedt, now Margaret Losinger.
The battle over Rolison’s money is a stark reminder that the beneficiary forms on retirement accounts, life-insurance policies and bank accounts matter. In most cases, they trump the will even if they were filled out decades prior.
And, as millions of Americans build up sizable workplace retirement assets, disputes over who gets the money are on the rise, lawyers say. The beneficiary forms are often lost, out of date or incomplete, leading to windfalls for some and disappointment for others.
“I’m just going through the motions and trying to do what’s right, what my brother would have wanted,” Brian said.
Under federal law, employers are generally required to pay out these retirement accounts to the last recorded beneficiary, or a surviving spouse if the spouse hasn’t filed a waiver. That could be a name on a 3×5 card filled out decades ago, as in Rolison’s case. Or it could be a name entered online. Adding to the confusion: Some employer plans, including P&G’s, haven’t integrated the old paper forms into their online systems.
“Inertia has the upper hand,” said Norman Stein, a law professor at Drexel University and senior policy adviser at the Pension Rights Center.
Action Line: If you’re not working with an advisor to help you get your finances in order then make sure you pay attention to the details like estate planning. If you want to talk, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
