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"Pending" cause of death prevents distribution to death beneficiary


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Participant dies while alone and with trauma to head evidently caused by falling on coffee table.

Participant has history of drug abuse and police confiscate her phone presumably to search for drug dealer?

Her body is cremated, and Death Certificate indicates cause of death "Pending". Indications from authorities are the cause of death may never be known. 

Plan Administrator refuses to pay plan benefits to surviving spouse death beneficiary until cause of death is determined, presumably out of concern that a state "slayer" statute may not be preempted by ERISA and might preclude payment to her slayer.

Wondering if anyone has encountered this situation or has a suggestion of how to deal with the impasse.

Many thanks for any suggestions.

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57 minutes ago, Belgarath said:

The legal eagles here can tell you if this suggestion is proper or valid, but what about filing an interpleader - let the court determine when it can be paid out, and get the Plan Administrator off the hook? 

I'm not sure about being a legal eagle, but generally I would agree.  However, is there any indication of foul play in the death of the participant?  The bene has an "ERISA" right to the benefits, and holding a request pending a cause of death when one may never be determined might give rise to liability as well.

This is clearly a fiduciary "judgment call."  Being a fiduciary is so much fun!

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Has the Plan followed its claim procedures?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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5 hours ago, Flyboyjohn said:

Participant dies while alone and with trauma to head evidently caused by falling on coffee table.

Participant has history of drug abuse and police confiscate her phone presumably to search for drug dealer?

Her body is cremated, and Death Certificate indicates cause of death "Pending". Indications from authorities are the cause of death may never be known. 

 

This just doesn't seem rational to me. Whatever/whomever precipitated the death, the coroner/medical examiner is going to determine the cause during the autopsy. And no police dept is going to just throw up their hands and say we may never know. Was it natural causes or did she just lose her balance? Or was there foul play? Regardless of that, the ME is going to complete the death certificate with something more than pending.

Weird vibes on this.

William C. Presson, ERPA, QPA, QKA
bill.presson@gmail.com
C 205.994.4070

 

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SLAYER STATUTES - PREEMPTION?  

    In Maryland, Section 11-112 of the Estates and Trusts Article (the “slayer statute”) provides, inter alia:

        "(c)(1) The survivorship interest of a disqualified person in property held with the decedent, including a form of co-ownership with incidents of survivorship, is severed at the time of the death of the decedent and the property passes as if the decedent and the disqualified person have no rights by survivorship."

In Laborers’ Pension Fund v. Miscevic , 880 F.3d 927 (7th Cir. 2018)
https://scholar.google.com/scholar_case?case=17460001952525060856&q=+Laborers%27+Pension+Fund+v.+Miscevic,+880+F.3d+927+(7th+Cir.+2018)&hl=en&lr=lang_en&as_sdt=20003&as_vis=1
the US Court of Appeals for the 7th Circuit issued an interesting opinion: 

        "In  January  2014,  Anka  Miscevic ("Anka") killed her husband, Zeljko Miscevic ("Zeljko"). At a state criminal proceeding, the court determined that Anka intended to kill Zeljko without legal justification. However, the court also determined that Anka was insane at the time of the killing and found her not guilty of first degree murder by reason of insanity. Following the criminal trial, the Laborers' Pension Fund (the "Fund") brought an interpleader action to determine the proper beneficiary of Zeljko's pension benefits. Anka claimed she was entitled to a Surviving Spouse Pension. The Estate of M.M. (Anka and Zeljko's child) argued that Anka was barred from recovering from the Fund by the Illinois slayer statute. After both parties filed motions seeking a judgment on the pleadings, the district court ruled in favor of the Estate of M.M. It determined that the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461, did not preempt the Illinois slayer statute, and that the statute barred even those found not guilty by reason of insanity from recovering from the deceased."

    Query:  Who is the winner in this case?  The pension that need not pay survivor annuity benefits to the insane wife.   


    Query:  Who are the losers?  The insane wife who will not have income for her support, (and will most likely be incapable of finding employment except as an elected official), whoever will wind up paying for her future support - maybe the State?  


    Query:  Redeeming feature of the decision?  A good discussion of Federal preemption under ERISA.  


    See also the 2020 case of Prudential Insurance Company of America v. McFadden, Civil Action No. 6:19-CV-051-CHB, (USDC, ED Ky 2020) discussing Federal preemption - 
https://scholar.google.com/scholar_case?case=17925077709511382629&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:17102308171145443235:AAGBfm2dXJvPo0nUQKlDLqIPUBXxyXMitw&html=


    In Hartford Life Insurance Company v. LeCou, et al., No. CV 19-17-BLG-SPW, 2021 WL 1312516 (D. Mont. Apr. 8, 2021), the US District Court for the District of Montana considered whether the Employee Retirement Income Security Act of 1974 (“ERISA”) preempts the Montana Code Annotated § 72-2-813, which states that an individual who “feloniously and intentionally kills the decedent forfeits all benefits under this chapter [Chapter 2 UPC—Intestacy, Wills, and Donative Transfers] with respect to the decedent’s estate.” Mont. Code Ann. § 72-2-813 (2). In this case, Cross-Claim Defendant Robert LeCou was convicted of deliberate homicide for killing his wife and two of her siblings. 

    The sole issue for the court was whether the wife’s qualifying plan benefits pass to her estate under Montana’s slayer statute. It would not pass to her estate if the Montana statute were preempted by ERISA. The court noted that this issue has not been addressed by Montana’s Supreme Court or the 9th Circuit. It also noted, however, that the U.S. Supreme Court, in Egelhoff v. Egelhoff, 532 U.S. 141, 152 (2001), explained that the underlying principle of slayer statutes and their uniformity across jurisdictions, leaned toward a finding that ERISA does not preempt such laws. Further, the Seventh Circuit in Laborers’ Pension Fund v. Miscevic, 880 F.3d 927, 934 (7th Cir. 2018) determined that Congress did not intend to supplant slayer statutes with ERISA because such statutes are a well-established legal principle that long-predates ERISA. “Congress could not have intended ERISA to allow one spouse to recover benefits after intentionally killing the other spouse.” Id. (citing Conn. Gen. Life Ins. Co. v. Riner, 351 F. Supp. 2d 492, 497 (W.D. Va. 2005). Consistent with those decisions, the court found that ERISA does not preempt Montana Code Annotated § 72-2-813 (2).

    In Munger v. Intel Corporation, No. 3:22-cv-00263-HZ, United States District Court, D. Oregon, (October 5, 2023) -
https://scholar.google.com/scholar_case?case=1046225108905078771&hl=en&lr=lang_en&as_sdt=20006&as_vis=1&oi=scholaralrt&hist=bY5nDLcAAAAJ:17102308171145443235:AFWwaea94w7XgMVkZLP-Q4RdIOLK&html=&pos=0&folt=kw
discussed whether or not the California slayer law was preempted by ERISA and by the case of  Egelhoff v. Egelhoff, 532 U.S. 141 (2001). 

But the real question is who has the burden of proof in your state? If the surviving spouse files suit the slayer statute would be an affirmative defense.  The burden on the surviving spouse is show that the Participant is dead. A litigant is not required to disprove every possible explanation.  The burden then shifts to the Plan to prove that he was a victim of a homicide by the surviving spouse that would then invoke the slayer statute.  How will that happen under the facts of your case. The body was cremated. 

Any evidence of wrongdoing - bullet hole, knife wounds, crush injuries. Somebody needs to explain the situation to the coroner and urge him to make the call and issue a report.  I have had friends that were taking blood thinners and fell and hit their heads on a piece of furniture and died of a cerebral hemorrhage.  

David

 

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I agree with Bill Presson. Facts don't seem right. My guess is that they did an autopsy and ordered a toxicology report. That may take a couple of months to be completed, but this was done before cremation so eventually the death certificate will show cause of death. Plan administrator should contact the medical examiner's office.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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If the plan’s administrator considers that any slayer-rule provision or law might apply or that a claimant might argue that a slayer-rule law applies, the administrator might consider also possible interpretations of the plan’s governing-law provision (if any), exclusive-forum provision (if any), and arbitration provision (if any).

If the administrator denies any claim, the administrator should follow its claims procedure and ERISA § 503.

Even if the administrator later might seek an interpleader, an administrator might first follow its claims procedure and decide a claim (at least for as much as the administrator can decide). An interpleader does not undo a court’s deference to a plan administrator’s discretionary decisions, at least for those decisions made before the interpleader. For example, Alliant Techsystems, Inc. v. Marks, 465 F.3d 864, 39 Empl. Benefits Cas. (BL) 1428 (8th Cir. 2006); see also Metro. Life Ins. Co. v. Waddell, 697 F. App’x 989 (11th Cir. 2017) (recognizing, even on interpleader, deference to a claims administrator’s discretionary authority); Liss v. Fid. Emp. Servs. Co., 516 F. App’x 468, 56 Empl. Benefits Cas. (BL) 3042 (6th Cir. 2013) (deferring to the administrator’s discretionary finding on whether a participant had made a beneficiary designation).

If circumstances surrounding a participant’s death suggest some possibility of a slayer situation, an administrator might balance competing interests. A fiduciary should not deprive a rightful beneficiary of the beneficiary’s right to a distribution. But a fiduciary also must exercise the care, skill, caution, and diligence ERISA § 404(a)(1) requires to protect the plan against paying or delivering a distribution to someone other than the rightful beneficiary. Some courts’ opinions suggest a plan’s administrator might breach a fiduciary duty if it approves a claim without considering whether the claimant is a slayer if:

(i)     a plan’s provision or applicable law deprives a slayer of the benefit claimed;

(ii)   the administrator or other decision-making fiduciary knew (or, had it used the care, skill, caution, and diligence required of the fiduciary, ought to have known) that the claimant is suspected of killing the participant or another person regarding whom the claimant would take; and

(iii) a prudent fiduciary acting with the required care would delay its evaluation of the claim until it could find whether the claimant is a slayer.

See, for example, First Nat’l Bank & Tr. Co. v. Stonebridge Life Ins. Co., 502 F. Supp. 2d 811, 815 (E.D. Ark. 2007); Atwater v. Nortel Networks, Inc., 388 F. Supp. 2d 610, 616 (M.D.N.C. 2005); Estate of Curtis v. Prudential Ins. Co., 839 F. Supp. 491, 495 (E.D. Mich. 1993).

None of this is advice to anyone.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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