Big Takeaway - Always keep your beneficiary designations up to date
How We Help You - Our team proactively conducts beneficiary statement reviews on your qualified accounts and insurance policies
The 1980s were a fascinating era in America, bursting with vibrant neon colors, bold fashion choices like big hair, shoulder pads, leg warmers, and the rise of jazzercise.
Giant boomboxes that were hoisted over shoulders blasted classic hits from Michael Jackson, Prince, Madonna, AC/DC, Queen, and Springsteen (Seeing it in list form…the 80’s really did have some pretty great music).
Movie theaters thrilled audiences with Marty McFly and Doc Brown’s time-traveling adventures in a DeLorean while the Ghostbusters’ fought paranormal forces in New York City. We learned that Darth Vader was Luke’s father (spoiler alert!), Indiana Jones found a Holy Grail, and Rick Moranis accidentally shrunk his kids. We maybe even cried a little bit when we lost Goose in Top Gun.
But for one young man in Pennsylvania, the 1980s was the decade where a single decision would become the start of a terrible mistake—one that would come back to haunt him decades later.
The story begins during the summer of 1985 in Bristol, Pennsylvania.[1] Like a lot of Pennsylvanians, Jeff Rolison was excited to start a job at the local Procter & Gamble factory. Young and eager to work his way up the corporate ladder, Jeff worked hard for two years and also managed to start a relationship with a waitress at a local restaurant in town, Margaret Losinger. A solid paying job with great benefits and a new girlfriend seems like the beginning of achieving the American dream!
One day while at work in the paper factory, Jeff was handed some forms regarding the Procter & Gamble Retirement Plan. Skimming through the official looking documents and scanning the legalese that he didn’t really understand, Jeff reached a section entitled “ENROLLMENT APPLICATON: BENEFICIARY DESIGNATION.”
Another employee explained to Jeff that the beneficiary is a person or entity that receives the proceeds or benefits of his retirement accounts if he were pass away. Without any hesitation, Jeff quickly scribbled in the name of his girlfriend, Margaret, as his beneficiary. They were in love, what could possibly go wrong?
Unfortunately, Jeff and Margaret weren’t meant to be. The love that burned neon bright in the 80s had lost its fire by the 90s. The couple broke up and Jeff had officially moved on from Margaret (or so he thought…)
By 2002, Jeff was in a serious relationship with Mary Lou. Apparently, our protagonist had some commitment issues because Jeff and Mary Lou were never married. One day, while working at the factory and daydreaming about his new true love Mary Lou, a Procter & Gamble employee came by with another official looking document. This time he had to fill out a beneficiary designation for a life insurance policy. Jeff quickly wrote Mary Lou’s name down as the primary beneficiary for his life insurance policy.
Similar to the fate of his relationship with Margaret, Jeff and Mary Lou ending things in 2014 after over 20 years of romance. Being now a more mature and financially responsible member of society, Jeff remembered to remove Mary Lou as his primary beneficiary on his life insurance policy.
Do you remember reading that Jeff removed his ex-girlfriend Margaret as beneficiary from his Retirement Plan after they broke up in the 1980’s? No, you do not, because Jeff never removed Margaret as the primary beneficiary when they ended things over 20 years prior. Over time, a small oversight by Jeff turned into a one-million-dollar problem for his loved ones.
Sadly, Jeff passed away unexpectantly in 2015. The assets he had accrued in his Retirement Plan had grown to almost $1 million in value. And guess who believes that she is entitled to every penny of that account? Yep, ex-girlfriend Margaret from the 1980s. A woman who he was not involved with whatsoever for over two decades but was still listed as the beneficiary on the plan would be distributed the proceeds instead of Jeff’s family and loved ones.
As you can expect, this situation ended up in court. The Estate of Jeff Rolison filed suit against Procter & Gamble accusing the company of “violating its fiduciary duty under ERISA to disclose material information to Rolison.”[1] The Estate argued that Procter & Gamble failed to provide Jeff with “specific information regarding his designated beneficiary” and merely supplied insufficient generic information regarding beneficiaries.[2]
The Court disagreed and ruled in favor of Procter & Gamble holding that the company had “adequately informed Rolison of the status of and how to change his beneficiary designation.”[3]
The Court went on to add that not only had Jeff designated a beneficiary in paper form, but he was also subsequently advised that the designation would remain valid and Jeff took “no action to change the beneficiary indicated nor did he express an intent to do so through some affirmative action.”[4]
To make matters worse, the Court even recognized that Jeff had logged into his account multiple times before passing away and failed to change his beneficiary. The website showed the beneficiary designation as blank, and Jeff failed to add a new name which would have replaced the paper form he filled out when he first started working at the company in the 1980s.
The Estate even dragged Jeff’s brother, Brian, into court and had him testify that his brother “would have never left the money to Margaret, as gift or otherwise, because they were separated and done.” Brian went on to testify that Jeff explicitly told him that he removed Maragaret as a beneficiary and had named Mary Lou and Jeff’s mother.[5]
The Court didn’t like that either, ruling that the testimony was based largely on speculation and hearsay and ultimately was insufficient to change the fact that Margaret was listed as the beneficiary. In the end, the Court ruled that under ERISA, Margaret Losinger, Jeff’s ex-girlfriend from 1987, was the “rightful, legal beneficiary of the Plan’s funds.”[6]
Shocking right? Jeff was dating a woman during the Reagan administration and over twenty years later she would become a millionaire overnight due to a simple oversight. Think of all those times Jeff logged on to his Procter & Gamble account and looked at the beneficiary designation and failed to act.
Here is where we step in and make a difference. While a judge sitting in a U.S. District Court in Pennsylvania may have ruled that Procter & Gamble did enough to help Jeff avoid his mistake (and by the letter of the law, they did), our goal is to make sure you sleep well at night by proactively identifying potential issues that could disrupt your financial plan. Major oversights could end up costing your loved ones millions.
You’ve worked hard to build your wealth, and your legacy deserves to be protected and passed on those who matter most to you.
So, the next time you are talking to an advisor on the Stevanovic Metz Group, and they ask about your beneficiary statements, just know that we’re trying to make sure your hard-earned money doesn’t end up with a summer fling from the 1980s.
[1] https://casetext.com/case/the-procter-gamble-us-bus-servs-co-v-estate-of-rolison-1
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
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