Legal Question in Wills and Trusts in Virginia

Re: Will enforcement

The beneficiary designation in the retirement account is the last word, even though the will was later. I can think of at least two reasons for this result:

First, a pension type arrangement enjoys special tax free privileges under with the IRS. In order to maintain that status, the pension plan must make payments only to members or their designees. If a plan administrator makes any distribution to other than a member or their designee (with one exception - a distribution under a court order for a former spouse) the entire plan could lose its tax exempt status.

Second, who is to say your brother was not aware of his beneficiary designation, and intended that his parents receive the funds, even though they may have been on the outs at the time of his death? Neither the plan administrator nor the IRS wants the plan to be involved in the sort of fact-based litigation that would be necessary if it were possible to challenge a beneficiary designation because the member-beneficiary relationship had changed.

Re: Will enforcement

A will covers the money owned by the decedent

at his death, but does not cover other items

or property with special designations.

For example, life insurance is money that is

not owned by the decedent at their death, because

it does not exist until they die. Also, it is

a contract to pay the beneficiary, and it is

governed by the terms of the contract.

A retirement savings plan is (probably) similar,

in that the money was only available upon

retirement, or payable to the designated

beneficiary on death.

Now, I say probably. One would have to look at

the documents creating the savings plan and

exactly what it says to be sure. For example,

if your brother had the right to withdraw the

money without waiting until a later retirement

age, then perhaps it is money that should be

included in his estate. You may have to get a

court ruling on whether or not it should be

included in his will and his estate.

This is one of many reasons why there is more

to preparing a will than simply getting a form.

I know that your brother apparently had legal

advice, and this is one of the topics that should

have been raised by the attorney in preparing

the will.