How do you check whether a beneficiary designation is real or a forgery?

Here’s the situation (with some facts adjusted slightly to protect my client’s and others’ privacy):

About four weeks after a 78-year-old participant’s death, the plan’s administrator receives a document the sender presents as the participant’s beneficiary designation. It is dated a few days before the participant’s death.

Nothing about the form is witnessed, by a notary or anyone else. But the employer has no record that its former employee ever had a spouse (or any child or other dependent), and the obituary mentions no spouse or former spouse and no child.

The employer/administrator worries that the ostensible beneficiary-designation form might not be the participant’s act.

Here’s the difficulty: Because the participant retired 16 years ago, the employer discarded records that might have showed its former employee’s handwriting. The retiree’s request, a few years ago, for automated minimum-distribution payments was processed through the plan’s website. The recordkeeper too has nothing that shows the participant’s handwriting.

No one now working for the employer knows anything about the retiree beyond what’s in a computer system record from when she retired. (The employer has tens of thousands of employees, and many retirees.)

What information would you want to form a discretionary finding about whether the form submitted as the participant’s beneficiary designation likely is the participant’s act?

What information might suggest to you that the ostensible beneficiary designation is not genuine?

How much money is at stake? Might make a difference in the extent of the investigation/effort.

Is the beneficiary form a legitimate PLAN provided beneficiary form? If yes, is this form available on a website for just anyone, or are the controls such that it would at least be very difficult for a criminal to obtain it? Is the website able to determine the IP address of the computer that was used to request the beneficiary form if requested on-line, assuming it was requested relatively recently? (I'm just tossing out random thought, as I'm a technological dinosaur, so I don't know what information can be legitimately gleaned.)

It may sound silly, but perhaps start with the return address on the envelope, if it was sent by mail?  If it is a legitimate address for the same person who is claiming to be the beneficiary, perhaps a search of public records could be initiated by a commercial service, to possibly find out if there is a relationship? Any way to check to see if the beneficiary's SS# is a legitimate #?

Is there any basis for filing an interpleader request?

Basically, I'd refer this to ERISA counsel anyway, so I'm no help!

That the remaining account is less than $100,000 hampers how much effort is prudent.

The writing received is on the proper form the plan’s administrator, with its recordkeeper, specifies. The form is not retrievable from the plan’s before-login website. But the individual who submitted the form is also a participant under the plan, and so could have retrieved the form after using his login credentials.

The ostensibly named beneficiaries seem to be friends of the decedent. None is described as a spouse, quasi-spouse, child, or other relative of the decedent. Her obituary mentions no spouse, child, brother, or sister; it mentions one cousin (who is not named on the form).

The form was mailed by the first-named of the ostensible beneficiaries, who also is participant under the plan, and the return address is the same as his plan address of record.

The decedent’s estate has not submitted any claim.

An interpleader is premature because there is yet no competing claimant. Or if the plan’s administrator pursues a declaratory judgment, the judge would insist on the administrator submitting its finding about what it believes is the correct result.

If the plan pays any ostensibly named beneficiary, the plan risks that a later claimant asserts that the form was a forgery and, absent a beneficiary designation, the decedent’s estate was entitled (as the plan’s default beneficiary) to the remaining account.

Thank you for thinking with me.

Might some other public or otherwise attainable recent records with the decedent's signature be accessed - such as a driver's license?

You mention no claim from an estate, but is there an estate and, if there is, could the executor be requested to find and release a copy of decedent's signature?

The claiming beneficiary could be asked to provide such supporting documentation, but unless such is provided through a certified third party you're essentially in the same situation.

I like Cuse's suggestion to discuss with the estate representative whether they will be filing a claim, and if so, begin the process of determining between competing claims (culminating in an interpleader if required).  Also, the estate may shed light on who the "natural bene's" of the descendent were. and if the named bene (the friend is not among them, that would raise suspicion in my mind).

This one is a tough one.  Not too much can be disclosed to anyone unless and until a determination of who at least a probable bene is - otherwise, it could be a release of NPI to a wrong party....

First of all, you need to read the applicable plan provisions very carefully. Some plans provide that a beneficiary designation is only valid if it is transmitted by the participant to the plan (in my opinion, it is a best practice to include such a provision precisely to avoid this question). The participant could never transmit a beneficiary designation after death so under those plans it would fail regardless of whether it is a forgery. If the plan is silent on that point, the plan's fiduciaries could adopt a formal plan interpretation that would likely be respected by courts under an arbitrary and capricious standard of review. 

Another important plan term to look at is whether there is a plan limitations period and exactly how that provision is framed. If the limitations period says that no claims may be filed more than 1 year after a claim accrues, and it defines accrual as having information sufficient to give rise to the claim, then notifying the potential claimant that you are giving the benefit to someone else may be enough to trigger the commencement of the limitations period. If the claim accrues only when a formal claim for benefits is submitted and denied (after exhaustion of administrative remedies), or if accrual is defined by reference to common law ERISA accrual concepts, then it may be much harder to get the period to begin accruing by sending someone a notice (that they ignore). As a practical matter, of course, reaching out to the estate and telling them they have a specified deadline to submit a claim could get the ball rolling. 

Another option would be to file an interpleader lawsuit. Correct me if I'm wrong, but I don't think you need to wait until both potential claimants have actually filed claims before you can file an interpleader lawsuit. The point of an interpleader lawsuit is to force everyone into one lawsuit who might have inconsistent claims against you. You "join" them to the lawsuit and force them to either bring or forfeit their claims before you pay out the benefit.

You might consider (1) talking to the estate to see if they think the beneficiary designation is legitimate, whether it lines up with the default beneficiary, etc., (2) adopting a formal plan policy, (3) issuing a claim determination denying the benefit in reliance on the policy, (4) denying the appeal, and then, (5) filing (or converting a lawsuit that the claimant files into) an interpleader lawsuit in which you force all of the parties to the table to firmly resolve all claims before you actually pay out the benefit to anyone. Or, you could file the interpleader at an earlier point in time before the plan takes any formal action. 

If an interpleader is not yet appropriate in your jurisdiction, how about filing a declaratory judgment action against the claimant and let the court decide if he gets the money.   The Plan Administrator should not allow himself to be placed in the position of making that determination.   If the beneficiary designation was signed a few days before his death, the Participant may not have been of sound mind.  He might have been in a coma.  This situation doesn't pass the smell test.  

If you deny the claim because the claimant did not follow the procedures and did not use the forms set forth in the plan documents, you will have a justiciable dispute as the basis for declaratory judgment.     

The Plan Administrator should contact the Plan's liability insurance carrier and ask for guidance.  

I don't have any ideas for validating a deceased participant's signature other than those already suggested, but this situation is why we include language in our plan document that requires the beneficiary designation to be received by the plan administrator during the participant's lifetime to be valid.

Thank you, all, for the many helpful suggestions.

CuseFan, on my list of potential paths is getting an inside researcher at the plan’s administrator to check the probate court’s records for the county in which the decedent was domiciled to see whether anything was filed.

MoJo, if the administrator finds a personal representative of the decedent’s estate, we’d likely seek information, but be unlikely to reveal information.

AKowalski and EBP, regrettably the plan’s governing documents lack a provision anything like those you mention.

AKowalski, I am considering a fact-finding aid that a writing not received with a reasonable mailing time from the date of death is presumed not genuine, unless evidence submitted to the administrator supports its finding that the writing was the participant’s authentic act. The plan grants discretionary authority not only to interpret the plan but also for findings of facts.

I like working with the plan’s time limit on claims.

An interpleader is possible without waiting for competing claims. The statute grants jurisdiction “if [t]wo or more adverse claimants, of diverse citizenship . . . , are claiming or may claim to be entitled[.]” 28 U.S.C. § 1335 (emphasis added). But there must be at least would-be or could-be takers. At least one must be “adverse” to another. Further, a could-be claimant must be sufficiently identified that the plan’s litigator could get service of process—else, who would be bound by the court’s decision? The plan’s administrator has not yet identified anyone with authority to act for the decedent’s estate.

Even if the administrator finds adverse claimants, we worry they might spend little or nothing on discovery. (Worse, a personal representative of the decedent’s estate might lack money to file anything.) A ticked-off Federal judge might order the interpleader petitioner, the plan’s administrator, to develop the facts. In those circumstances, it’s simpler, and less expensive, to pay an at-risk distribution.

Seeking a declaratory judgment is available only “[i]n a case of actual controversy” and only if the case is “within [the Federal court’s] jurisdiction[.]” 28 U.S.C. § 2201(a).

(The plan’s administrator would not consider proceeding in any State’s court. And if anyone asks a State’s court for a declaratory judgment, the administrator would challenge jurisdiction anywhere but the State in which it is organized and has its principal office.)

fmsinc, thank you for describing suspicions about a writing ostensibly signed a few days before the participant’s death. That’s what started my query.

All, a discretionary finding is a straightforward path (and likely is so no matter which finding the administrator chooses). A disappointed person is unlikely to find a lawyer to pursue anything. And showing the administrator abused its discretion with an unreasoned (and so capricious) finding is an uphill climb. This administrator will put efforts on both the reasoning and the written record.

I really appreciate everyone’s wonderful help. Even if there is no one clear and simple solution (and how would there be with missing and ambiguous facts?), you’ve helped me think this through.

I would check on Plan language absolving the Plan Administrator from any duty to take any actions as described so long as it acts reasonably and not arbitrarily or capriciously.  Continental Airlines tried to investigate  a bunch of Texas pilots getting sham divorces (in order to access their DB benefits through QDROs and then immediately re-marry).  In a 2011 decision, the Fifth US Court of Appeals ruled that the administrator COULD NOT consider or investigate why employees get divorced or whether the divorce was genuine.  See https://www.nbcdfw.com/news/local/pilots-win-sham-divorce-case-against-continental/2121509/ 

Even assuming that an administrator even has this authority, I would not want to put an administrator through intrusive activities outside the scope of the Plan document to confirm a beneficiary designation when it has never sought such evidentiary proof previously.

A lot of good suggestions above, Peter. In addition, I would probably try talking to the employee to at least get the story of why the decedent wanted to leave the account to him or her. If it is plausible that the employee knew the deceased, it seems quite possible that the deceased, having no one else to leave his or her account to, left it to this individual. Perhaps the employee visited the deceased in the hospital? You might also see whether the hospital or hospice where the individual died (most likely; some people die in their homes) has a signature on a consent/admission form.

If the ages and work histories indicate that the deceased is unlikely to have known the employee, and especially if the employee would have known of the death (e.g., working in HR), and if the employee has not been with the employer long so has no history of trust, I would question more deeply.

On 1/10/2023 at 5:05 PM, EBP said:

I don't have any ideas for validating a deceased participant's signature other than those already suggested, but this situation is why we include language in our plan document that requires the beneficiary designation to be received by the plan administrator during the participant's lifetime to be valid.

 

This was my first thought too..we acted on the beneficiary information that was in place at the time of death. There shouldn't be a way to change the beneficiary after the fact. 

If someone mentioned this earlier I apologize. Is there any way the PA can find out how likely it was that the decedent was in a position - mentally and physically - to make this beneficiary designation on the date in question? The PA doesn’t need certainty, just enough info or lack thereof to help it decide what to do next. I would also ask the employee if he knows where the decedent was when the designation was made and if he was with her at the time and if so who else can verify that. Also, did decedent hand it to him when finished and if not how did he get it. Would not have this conversation over the phone as seeing his face while responding  could be helpful too.

I would add that it is at least prudent, if not required, for the PA to be suspicious and act accordingly. By the way, with no spouse, siblings, lineal descendants or parents, who is the default beneficiary? 

jpod, thank you for your further observations.

For the reason you suggest and some others, I tell plan administrators to read the death certificate, which often has some information about illnesses and causes of death, and sometimes about who called in the death.

Likewise, we read obituaries, which often name a spouse, children, other relatives, friends, and others, and mention personal details about the decedent. We’ve often quickly discerned a claimant’s false statement from what was described in an obituary retrieved from a first page of Google results.

Some steps you suggest, while they might be useful with a small-business employer’s plan, might be inefficient, impractical, or inapposite for a plan with tens of thousands of participants, especially if claims-handling is mostly outsourced.

For the plan that’s the subject of this discussion, the default beneficiary is the participant’s estate. If that provision applies, the plan pays the estate’s personal representative (and need not know anything about who takes from the estate).