The U.S. Supreme Court said yesterday that DuPont Co. was correct to pay a deceased employee's retirement benefits to his ex-wife, even after she had renounced her rights to the pension during divorce proceedings.
When William Kennedy married he designed his wife, Liv Kennedy, as the beneficiary to his pension and named no contingent beneficiary. She waived her rights to the retirement money in their divorce decree when the couple divorced 22 years later. But William Kennedy never changed his beneficiary on the retirement account.
After William Kennedy died in 2001, his daughter, Kari Kennedy, sued DuPont to recover her father's $402,000 pension. DuPont said that to comply with federal pension law it had to follow William Kennedy's instructions on the original form and pay the pension benefits to his ex-wife. The Supreme Court agreed with DuPont in an unanimous ruling.
The take home message: Remember to update beneficiary forms whenever there is a change in your family status. “Parties going through divorces should be sure to change beneficiaries if permitted after the divorce is final,” says Carrie Byrnes, a Chicago benefits and compensation attorney for Bryan Cave LLP, who is not affiliated with the case. “Family law attorneys should also be sure to counsel clients to change beneficiaries.”