A recent Northern District of Texas ruling reminds life insurance and other benefit plan sponsors, fiduciaries, administrators and insurers of the benefits of including clear, unambiguous beneficiary designations in their plan documents.

The District Court in Metropolitan Life Insurance Co. v. Wallace granted a domestic partner and common-law wife’s summary judgment for ERISA plan life insurance proceeds in an interpleader action brought against the plan.

The action arose after the insured died without designating a beneficiary.

Ambiguous beneficiary designation provisions can expose plans and their fiduciaries to significant cost or expense where the plan doesn’t contain clear rules. In this case, the plan document has clear provisions for determining the beneficiary.

The Court found the plan terms mandated that the plan distribute benefits to a spouse or domestic partner before the deceased’s parents. Accordingly, distribution to the common law spouse or domestic partner was upheld.

For More Information 

We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, or health care developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or telephone at (214) 452-8297.

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