In a surprising turn of events, Margaret Sjostedt (now Losinger) might inherit $1 million from her ex-boyfriend, Jeffrey Rolison, nearly 40 years after their breakup.
The Backstory:
- 1987: Rolison named Sjostedt as the sole beneficiary of his retirement account on a handwritten form.
- 1989: They broke up, but Rolison never updated his beneficiary form.
- 2015: Rolison passed away without a will, leaving no clear guidance on his estate, leading to a legal battle between Sjostedt and Rolison’s brothers.
Legal Battle:
- Beneficiary Form: Despite their breakup, the 1987 form is legally binding. Rolison's brothers were shocked to learn about Sjostedt’s claim and believed Rolison did not intend to leave the money to his ex-girlfriend.
- Notifications: The court found that Procter & Gamble had notified Rolison multiple times about updating his beneficiary designation, including transitions to an online system, which he never utilized.
- Federal Law: Employers must pay out retirement accounts to the last recorded beneficiary, regardless of their relationship to the deceased at the time of death.
Court Decision:
- Ruling: A U.S. District Judge ruled in favor of Procter & Gamble and Losinger, noting that the employer fulfilled its duty to inform Rolison about his beneficiary designation. The retirement funds were awarded to Losinger, though they remain in escrow as the brothers pursue further claims.
Key Lessons:
- Update Beneficiary Forms: Regularly review and update beneficiary designations, especially after significant life events such as marriage, divorce, or the birth of a child. Making it a habit to check these forms during financial reviews or tax season can prevent such issues. As technology has vastly improved since 1987, most beneficiary forms are now updated and created online.
- Understand Legal Implications: Beneficiary designations on retirement accounts and insurance policies generally take precedence over wills. It's crucial to pay attention to notifications from employers and take necessary action.
- Proactive Estate Planning: Create and update your will to mirror your beneficiary designations. Clearly communicate your intentions to your family to avoid misunderstandings and ensure that your assets are distributed according to your wishes.
- Seek Professional Advice: Consult with financial advisors or estate planners to ensure that your beneficiary designations align with your overall estate planning goals. If in doubt, seek legal assistance to understand the implications and make necessary changes.
This situation serves as a stark reminder of the importance of keeping beneficiary forms up to date on retirement accounts, life insurance policies, and bank accounts. By staying vigilant and proactive, individuals can avoid unintended consequences and legal battles, ensuring that their assets are distributed according to their wishes. As more Americans accumulate substantial retirement assets, these lessons become increasingly relevant to safeguarding financial futures.
Source: Rolison’s story was first reported by The Wall Street Journal.