Ex-Wife Awarded Deceased Partner's Retirement Plan Assets
An appellate court ruling settled a lawsuit over whether a retired worker had properly changed his beneficiary.
The U.S. 7th Circuit Court of Appeals awarded a deceased retirement plan participant’s assets to his ex-wife, ruling that his faxed beneficiary change request did not meet the Packaging Corp. of America plan’s formal requirements for changing beneficiaries.
In Packaging Corp. of America Thrift Plan for Hourly Employees v. Dena Langdon, Carl Kleinfeldt divorced Langdon in September 2022. At the time, Langdon was the primary beneficiary of Kleinfeldt’s retirement plan. After the divorce, Kleinfeldt faxed the plan’s benefits center to remove Langdon as his primary beneficiary. However, when Kleinfeldt died in January 2023, Langdon remained listed as the primary beneficiary, leading to a dispute between Kleinfeldt’s estate and Langdon over the funds.
The U.S. District Court for the Western District of Wisconsin determined that Kleinfeldt had successfully removed his ex-wife as a beneficiary, but the Chicago-based 7th Circuit disagreed, concluding he did not follow the procedure outlined in the plan documents.
The plan documents advise plan participants to “keep your beneficiary designation and your beneficiary’s address up to date. To do so, contact the PCA Benefits Center … or you can update your beneficiaries online.”
Instead of following this procedure, Kleinfeldt submitted his request via fax on October 4, 2022. In the fax, he told the center to “please feel free to fax any necessary paperwork to the above fax that I may need to complete.”
Although the appellate court’s three-judge panel agreed that his actions clearly showed intent, it ruled that his action was not similar enough to processes set forth in the plan documents to qualify. Since he suggested in the fax that there might be further steps but did not follow up nor further commit to the change, he failed to meet the standards set forth in the documents, according to the court’s ruling.
As a result, Langdon remains the primary beneficiary, and the estate of Kleinfeldt’s deceased sister will be the contingent beneficiary.