A Telephone Call Is Not Enough to Change a Beneficiary Designation

Merely calling to request a change in the beneficiary may not be enough to effectuate it. Rather, there must be compelling evidence proving a change was desired.

Merely calling to request a change in the beneficiary may not be enough to effectuate it. Rather, there must be compelling evidence proving a change was desired. A U.S. district court ruling potentially adds to case law about what is required to legally prove a change in beneficiary status. A few years ago, a U.S. circuit court of appeals found that merely designating a beneficiary in a prenuptial agreement is not enough to enact a spousal waiver in an employee benefit plan (“Prenuptial Agreements May Not Waive Beneficiary Rights,” AAII Journal, September 2013).

The facts of the recent case highlight the importance of making changes to beneficiary designations in writing. Asa Williams Sr. worked for Xerox and was a participant in their benefit plans. He listed his then wife Carmen Stephanie Mays-Williams as a beneficiary. After they were divorced, three calls were made to Xerox requesting to change the beneficiary designation from Carmen to his son Asa Williams Jr. After each call, Asa Sr. was sent an authorization form asking him to validate the change. The forms were not sent back following the first two calls. Following the third call, the forms were sent back unsigned. Xerox then sent Asa Sr. two letters informing him that no change had been made because the forms were unsigned. Asa Sr. passed without signing the forms.

In issuing the court’s opinion, U.S. District Judge Benjamin Settle viewed the lack of a signed authorization as “compelling evidence” of Asa Sr. ultimately not wanting to change his beneficiary designations. Settle further pointed to Asa Sr.’s ongoing “good relationship” with his ex-wife, Carmen, as signs of not wanting to alter to the designation.

There were also other factors that went against Asa Jr.’s assertion about his father’s intentions regarding who should be the beneficiary. No username or password was set up with Xerox and the court could not identify who actually requested the change. Asa Sr. did not alter his beneficiary designations after his divorce from Carmen despite instructions from his lawyer to do so. Finally, Judge Settle pointed to a “lack of any clear and unequivocal communication” regarding Asa Sr.’s intentions.

Source: Becker v. Mays-Williams, United States District Court, W.D. Washington, Tacoma, March 8, 2016.