Look, I love a good soap opera. I grew up on Dallas, and I still sneak in The Bold and the Beautiful when I can. There’s something about the betrayal, the big reveals, and the constant twists that makes it compelling. But you know where I hate a good soap opera? In 401(k) plan beneficiary designations.
On May 1, 2025, the Fifth Circuit handed down a decision in LeBoeuf v. Entergy Corp. that reminds us—yet again—why 401(k) plan sponsors, participants, and yes, even plan committees, need to treat beneficiary designations like legal documents, not romantic subplots.
Let’s run through the plot.
Meet the Cast
Alvin Martinez worked for Entergy Corporation for over 35 years. He had a 401(k) plan account, worth about $3 million at the time of his death. In 2002, his wife passed away. In 2010, Alvin submitted a beneficiary form listing his four adult children as his beneficiaries. That form came with a warning: if he got remarried after submitting the form, his designation would be revoked unless he updated the form after the new marriage and got a notarized spousal waiver.
That warning wasn’t buried in the fine print—it was spelled out in black and white.
Fast-forward to 2014: Alvin gets remarried. No update to the form. No spousal waiver. Just quarterly statements from the plan that continued to list his kids as the beneficiaries—statements that apparently didn’t mention the plan rule that a new marriage nullifies a prior designation.
In 2021, Alvin passes away. The Committee paid the money, $3 million, to the second wife, not the adult children. The kids sued. The court said: case closed.
Don’t Blame the Committee
The adult children argued that the Committee misrepresented the plan by not correcting the quarterly statements. The court didn’t buy it. Why? Because Alvin got the plan document, the beneficiary form, and at least nine summary plan descriptions (SPDs) explaining the marriage provision.
He had the information. He just didn’t act on it.
The court also emphasized that participants have a duty to inform themselves about the plan. That’s a crucial takeaway. We live in a world where everyone expects the plan sponsor or recordkeeper to hold their hand through every life event. But here’s the truth: retirement plans aren’t babysitters. If you remarry, it’s on you to update your beneficiary form. If you divorce, same thing. If your beneficiary dies, again—your responsibility.
This Soap Opera Happens Too Often
I’ve seen this exact scenario more times than I care to count. It’s not just big companies like Entergy, this happens with small businesses too. A participant dies, and then the phone calls start. “But he told me I was the beneficiary.” “The quarterly statement says my name!” “He wouldn’t have wanted it this way.”
Maybe all true. But courts don’t care what he would have wanted. They care what he did. And if he didn’t update the form or get the spousal waiver, it doesn’t matter what’s on the statement.
The Fix: Annual Beneficiary Reviews
If you’re a plan sponsor reading this, here’s your action item: require your participants to review their beneficiary designations every single year. Make it part of your annual open enrollment or 401(k) check-in. Better yet, anytime a participant notifies HR of a life event, marriage, divorce, birth, death, make beneficiary review mandatory. It’s a small ask that avoids million-dollar mistakes.
Also, let’s get real: plan recordkeepers need to put disclaimers on those quarterly statements that remind participants the listed beneficiaries may be voided by life events. It’s not foolproof, but it’s better than radio silence.
Final Thought
Beneficiary designations aren’t dramatic until they are. Then suddenly, your 401(k) plan becomes an episode of Days of Our Lives, with grieving children and confused spouses fighting over a retirement account.
Don’t let that happen. Don’t let your plan be the one that ends up in federal court over a misunderstood form.
Because in the 401(k) world, the drama should be about investments, not inheritance battles.
And if you’ve got questions about cleaning up your beneficiary process or educating your participants, give me a call. I’d rather help you write a happy ending now than untangle the soap opera later.
