Trusts & Estates - and ERISA

2018.07.03 "View From Proskauer: Clear ERISA Plan Beneficiary Designations Go a Long Way, but They Don’t Protect Slayers" (Bloomberg BNA), with the following excerpt giving a sense of what this article covers:

  • Most, if not all, states have so-called “slayer statutes”—statutes that prohibit killers from being beneficiaries of their victims’ pension benefits, by providing that the killer is deemed to have predeceased the victim. The existence of these statutes can pose a dilemma for plan administrators, who must determine whether to follow a properly executed beneficiary designation, which would require payment to the beneficiary-killer, or the state slayer statute, in which case a contingent beneficiary must be identified.
    But which law applies: ERISA or the state slayer statute? The U.S. Court of Appeals for the Seventh Circuit recently became the first circuit court to decide the issue. Relying on dicta from a nearly two-decade old Supreme Court decision, the Seventh Circuit held that that ERISA does not preempt the Illinois slayer statute and that the statute precluded the killer from being the beneficiary of the decedent’s ERISA pension benefits. Below, we briefly review ERISA preemption principles, review the Seventh Circuit’s decision in Laborers’ Pension Fund v. Miscevic, 880 F.3d 927 (7th Cir. 2018), and then conclude with implications of the Court’s decision for plan administrators and offer some considerations to think about concerning beneficiary designations.