Retirement Plan Terms Can Trump State Probate Laws

1. Retirement Plan Terms Can Trump State Probate Laws Having specific language and instructions in wills or estate plans can help distribute a decedent’s assets in accordance to their wishes. There may be cases where more than one beneficiary can lay claim to a decedent’s assets. As San Antonio probate attorneys, we often see this when individuals feel they are entitled to the property or asset or there was some problem with how the estate plan was executed. This can also come up if the intended beneficiary under the estate plan died before the party who created the will.

2. Disputes in this area often arise when one party dies right after receiving an inheritance, which brings up the question of whether retirement plan terms can trump state probate laws. Facts & Procedural History The decedent participated in a retirement plan. The plan was qualified under ERISA, as is the case for most retirement plans. The beneficiary designation form for the retirement plan listed the decedent’s husband as the beneficiary in the event of her passing. Her brother was the contingent beneficiary. Her husband was survived by his brother and his brother was his sole heir. The facts in the case are such that shortly after the decedent passed away, her husband, the intended beneficiary, also passed away. After both of their deaths, the plan’s administrator paid the retirement account to the husband. The wife’s brother then sued the husband’s estate on the basis. He cited the 120-hour rule. The court had to decide whether the decedent’s husband was alive for a certain period of time after her death and if his estate should receive the retirement account proceeds, or if it

3. should go to a different beneficiary. Texas 120-Hour Survival Law The Texas Estates Code addresses the situation when one party dies close in time to the other party. Section requirement for beneficiaries: 121.102(a) provides a 120-hour survival If property is disposed of in a manner that conditions the right of a beneficiary to succeed to an interest in the property on the beneficiary surviving another person, the beneficiary is considered not to have survived the other person unless the beneficiary survives the person by 120 hours, except as provided by Subsection. If an interest in property is given alternatively to one of two or more beneficiaries, with the right of each beneficiary to take being dependent on that beneficiary surviving the other beneficiary or beneficiaries, and all of the beneficiaries die within a period of less than 120 hours, the property shall be divided into as many equal portions as there are beneficiaries. The portions shall be distributed respectively to those who would have taken if each beneficiary had survived.

4. Who Inherits: The Parties Arguments In this case, the decedent’s brother argued that the decedent’s husband failed to live past the 120-hour time period, and, as a result, the husband was not entitled to inherit the retirement account proceeds. According to the brother, it was the brother who should be entitled to inherit the plan because he was the decedent’s contingent beneficiary. The only requirement was that the primary beneficiary be alive at the time of the account holder’s death. This led to the plan administrator to determine that, based on plan documents and beneficiary designations, the decedent’s husband should have received the benefits and that the Texas survival statute did not apply. As such, retirement plan terms can trump state probate laws.

5. The Takeaway Do you need help with a probate matter in San Antonio or the surrounding area? We are San Antonio probate attorneys. We help clients navigate the probate process. Call today for a free confidential consultation, (210) 239- 8518. Disclaimer The content of this website is for informational purposes only and should not be construed as legal advice. The information presented may not apply to your situation and should not be acted upon without consulting a qualified probate attorney. We encourage you to seek the advice of a competent attorney with any legal questions you may have. Get in Touch With Us : www.san-antonio-probate.com (210) 794-7372 Also Find Us at : https://shorturl.at/bdzHX https://shorturl.at/cosCW https://shorturl.at/fgmDI https://shorturl.at/xRST0