Retirement Accounts - Does the Beneficiary Matter?
To be clear, every state is different. However, as an update for those who either hold retirement accounts in Utah or else have their estate documents (i.e. Trust/Will, etc) governed by Utah law, a recent decision from the Utah Court of Appeals is useful in clarifying a few points regarding who we each choose to name a beneficiary in a retirement account.
The case (In re Estate of Deeter, 2020 UT App 65) involves a man who verbally told his second wife that she would be named a beneficiary on some of his older retirement account, but the man never did this while alive. Instead, after his passing, some of the retirement accounts with delivered to his brother, who was named as a contingent beneficiary. Although it may have been true that the deceased husband displayed what is called testamentary intent to provide these accounts to his wife, he did nothing to make this happen while he was still alive. The Court referenced a law in Utah (UCA 75-6-201) in which retirement contracts are deemed as “nontestamentary” and therefore any beneficiary designation that was selected would be interpreted using the principles and rules of contract law and not the principles and rules related to testamentary intent.
This serves as a reminder to everyone that an estate plan is only as good as it is current. If you have not reviewed your plan recently, do so soon. If you have not made the necessary changes or selections, take care of things.
If questions come up about this process, we’re always here to help you and your loved ones walk through these questions.