By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning Attorney

So you have just powered your way through a nasty divorce.  You bought out your ex-spouse’s share of the marital home, and he or she has hit the road.  You continue your full-time job that includes a pension you have been putting money towards all during your career.  Death comes to you unexpected, and your money is sitting in your pension fund to be distributed. After your divorce you had a will redone and executed stating your children get everything in the estate, including your pension benefits. Now that you’re dead here comes your ex-spouse.  He or she claims that the pension benefits are his or hers because you designated him or her as the beneficiary of your pension, despite executing a will that says otherwise.  The company gives the money to your ex-spouse, who is the last person you wanted that money to go to.


Sadly, the case above is seen far too often in divorce cases.  Pension plans are governed under federal law, and federal law provides no recourse for the federal courts to change a beneficiary after someone dies.  Federal courts have the power to do three things with pension plans: enforce the plan’s terms to give beneficiaries their money, recover benefits from a fiduciary who has breached his or her duty, or reform terms of the benefit plan that are contrary to federal law.  Courts have reformed plan terms if they are held to not conform with ERISA, and provide relief in cases of the misrepresentation of pension plan terms to beneficiaries and retaliation by employers in firing employees to prevent them and their beneficiaries from collecting pension benefits.  No court, however, has changed a beneficiary upon the decedent’s death.

Interestingly, many states have adopted laws that automatically terminated a former spouse’s share in the estate.  However, in 3 US Supreme Court cases, the Court has struck down each state law, holding in Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan that the plan administrator has a duty to follow the designated beneficiary of the pension plan, no matter if there is a conflicting designation in a will or even a waiver of benefits agreed to by a beneficiary in a divorce decree.  The Supreme Court has stated that it is the fiduciary’s duty that the pension plan holder to adhere to the plan’s requirements and follow the beneficiary designated, no matter if it was waived in a subsequent document.

So, as the cliché goes always be aware of where your money goes, and remember that a will or trust cannot control everything.  Make sure your pension benefit is going to the person you want. If you want benefits to go to a trust, indicate you want the benefits to go to the trust and not a living person.  Otherwise, your money will not go to the loved one it was intended for.

To discuss your NJ Estate Planning and Asset Protection matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.