ALKHAFAJI v. TIAA-CREF, LLC
No. 5 of 2008, O.C.
This case is a dispute over the proper beneficiary of a decedent’s retirement certificate. The decedent, as per the Property Settlement Agreement with his second wife in 1995, listed his son from his second marriage and two daughters from his first marriage as beneficiaries of his retirement account. However, his Will provided that the beneficiaries of his pension were his third wife and all his biological children. In addition, the Will provided that the pension be distributed according to Islamic law. He wrote this will prior to his death, when he was hospitalized as a result of deteriorating health.
After decedent’s death, petitioner – third wife – sent a copy of his Will to the pension administrator. The respondent’s argued that the Will was not sufficient to change the beneficiary designation on the pension.
Whether the decedent’s Last Will and Testament was sufficient to effectuate a change of beneficiary given decedent’s deteriorating health and hospitalization prior to his death.
The court found that the Will was sufficient written notice to effectuate the change in his life insurance. Under Pennsylvania law, an insured may change the beneficiary of his life insurance policy by making a reasonable effort under the circumstances to effect the change. In making its findings, the court noted that the decent made reasonable efforts to change the beneficiary, as he was hospitalized the entire time after an accident in March 2007 where he became a quadriplegic and was therefore confined to the hospital. Thus, the pension was distributed according to the decedent’s Will.
It is noteworthy that the court, in reviewing the marital settlement between the decedent and his second wife, found that there was no language to indicate that the beneficiary set forth in the marital agreement were to be the sole and exclusive beneficiaries of the account. Nor was there any provision in the marital settlement agreement that prevented or prohibited the decedent from changing beneficiaries of the account or prohibited or prevented him from adding beneficiaries to the account.
The court found that the decedent’s Last Will and Testament was sufficient to comply with Pennsylvania law and his pension was distributed in accordance with Islamic law.