Retirement Account Probate Lawsuit: January 27, 2015 estate case tortuous interference with inheritance

Employee benefit accounts such as IRA’s, Roth IRA’s and 401(k)s are   extremely common and do not pass the same way as other property often dubbed probate property pass. These types of accounts are not only governed by probate law but also sometimes by federal law, such as the Employee Retirement Income Security Act (ERISA). So what happens when your husband dies with a huge retirement account? This was an issue in a January 27, 2015 case out of Michigan.

• Crystal Waller challenged several decisions of the probate court related to the administration of her father’s estate.
• Crystal’s father died intestate in 2008, at that time he was separated but not divorced to his second wife (Crystal’s step mother).
• Crystal was appointed as personal representative as opposed to the testator’s wife Sharon Waller whose union was the subject of a premarital agreement.
• Sharon Waller claimed entitlement to the decedent’s retirement account- a 401(k) and the Court appointed a special fiduciary of the account in accordance with ERISA.
• Crystal denied Sharon’s entitlement to the proceeds of the decedent’s 401(k)/ personal savings plan fund.

• ERISA is a federal law intended to provide a uniform regulatory regime over employee benefit plans.
• Here, Sharon’s entitlement to the proceeds of the decedent’s retirement plan was established by ERISA and Crystal lost the appeal.

Any Palm Beach Probate Attorney will tell you that federal law is supreme over state lawso although Probate is generally state law it cannot go over federal law’s head, so your disposal of certain funds such as retirement accounts need to be line with the federal standards or you risk them passing through the rules of intestacy.

In this case since the Personal Representative (Fraser, an independent PR, was appointed to replace Crystal when litigation ensued) ended up winning against Crystal on all fronts and was entitled to costs. You want to make sure your arguments are grounded in law and not just what you want like Crystal’s arguments, because it could end up costing you a big chunk of your inheritance.

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