Imagine this: You’re in your twenties, just starting your career. You fill out a form at work, naming your live-in significant other as the beneficiary of your retirement account. You start contributing to your retirement account, and it begins to grow. Fast forward 28 years – you’ve long since ended that relationship, lived a full life, and then died. But you never changed that beneficiary designation, and now that ex-partner is entitled to your million-dollar retirement nest egg while your family is left with nothing.
Sound far-fetched? It’s not. This is precisely what happened in a high-profile lawsuit involving Margaret Losinger and her former boyfriend, Jeffrey Rolison, alongside Procter & Gamble, the company he worked for during those 28 years. Let’s take a closer look at this shocking real-life story, the lessons we can learn, and how having a trusted advisor at every stage of life can protect you from making a million-dollar mistake like this – or any other mistakes that you might be overlooking.
What Happened?
In the 1980s, Jeffrey Rolison dated Margaret Sjostedt, and the two lived together. Rolison worked at a Procter & Gamble (P&G) plant, where he signed up for a profit-sharing and savings plan. In 1987, he listed Sjostedt as the sole beneficiary of his retirement account. The relationship ended two years later, and both moved on. Sjostedt eventually married, taking on the last name Losinger.
Rolison, however, never updated his beneficiary designation on his retirement plan. In 2015, Rolison passed away at age 59, single and childless, with no will and no guidance on who should inherit his assets. His retirement account, which had grown to $1.15 million, was still designated to Losinger.
Rolison’s brothers, Brian and Richard, were shocked when they learned that Losinger was the beneficiary of Rolison’s retirement account. They believed their brother wouldn’t have intended for his long-ago ex-girlfriend to receive his retirement savings. The brothers filed a lawsuit against P&G and Losinger in 2017, trying to redirect the money to Rolison’s estate.
On April 29, 2024, an appeals court issued a ruling, declaring that Losinger was entitled to the money. After fighting for four years, Rolison’s family lost their claim to the million dollars in Rolison’s retirement account, as well as all the legal fees and court costs invested in the fight. Because we have no doubt you wouldn’t want this to happen to your family, read on …
Why Even “Simple Estates” Require Trusted Guidance
Before we proceed, let’s clarify what estate planning is and why you likely need the guidance of a trusted advisor, even if you think your estate is “simple” or you don’t really need an estate plan.
What is Estate Planning? Many people consider estate planning something only needed by the wealthy or the elderly. As you can see from this case, that’s simply not true. Rolison wasn’t wealthy when he chose to name Losinger as the beneficiary of his retirement account. He probably wasn’t wealthy when they broke up, either. However, not having an estate plan—or the trusted guidance to know what he needed – cost him dearly.
At its core, estate planning ensures all of your assets pass to the people you want, in the way you want, with the right guidance and support to make that happen smoothly. It’s also about ensuring that if you become incapacitated, your wishes are known and honored.
Most importantly, estate planning is about your choices and your freedom. How important is it to you to have a say in what happens to your hard-earned assets and your loved ones when the time comes? If it matters to you, you need an estate plan. It’s that simple. Without one, the government decides for you.
How Beneficiary-Designated Accounts Factor Into Your Estate Plan
Beneficiary-designated accounts – like retirement accounts or life insurance – are a crucial part of your estate plan. These designations override any will or trust you might have created.
From the case I shared here, we see that Rolison didn’t have a will. However, even if he had one, it wouldn’t have mattered; beneficiary designations come before any will or trust. Beneficiary forms are powerful documents that dictate who receives your retirement accounts, life insurance policies, and bank accounts. If you filled out a beneficiary form years ago and haven’t updated it, the person named on that form will likely receive the assets, regardless of your current wishes.
The biggest takeaway from the Rolison/Losinger story is that beneficiary accounts are integral to your estate plan and should be reviewed regularly. This is why we include a review of all your accounts, beneficiary designations, and an inventory of your assets – long with updating programs for ongoing review – in all of our Life & Legacy Plans.
Why You Need Regular Reviews of Your Accounts and Beneficiary Designations
Rolison’s case highlights how easy it is to forget about your beneficiary designations, especially if they were filled out years ago. Neglecting to update your accounts can lead to unintended consequences and legal battles for your loved ones.
In Rolison’s case, his brothers argued that P&G failed to inform him adequately about his beneficiary designation. They claimed the company didn’t provide sufficient warnings when it changed service providers and in its monthly statements. However, most companies do not remind you to review your beneficiary accounts. When was the last time your bank reminded you to check the beneficiary designations on your checking account? What about your life insurance company? Have you taken it upon yourself to review your beneficiary designations regularly?
If not, it should be a priority. The court ruled in favor of P&G and Losinger because the responsibility for keeping beneficiary information current rests with the individual.
How Accountability Makes All the Difference
Your life is busy. Sometimes, just getting through the day with all your responsibilities can be a challenge, right? Probably the last thing on your mind is planning for your death and incapacity. You might think you can do it later. But the truth is: “later” could be tomorrow.
We all know we will die; we just don’t know when. I’m not saying this to scare you. It’s a reality, and I want you to be prepared so that what happened to the Rolison family won’t happen to yours. When you plan for it, you can live your life with more purpose and peace of mind, knowing you’ve done right by your loved ones.
If this resonates with you, know that having a trusted advisor by your side can make all the difference. My Life & Legacy Planning process includes regular check-ins and reviews of your plan, including your beneficiary accounts. The best part? You never have to think about it alone! Unlike most lawyers who do estate planning, I will remind you regularly to update your plan and keep you accountable. Together, we’ll ensure your family inherits your accounts – not an ex-girlfriend you dated 40 years ago.
We Do the Heavy Lifting So You Don’t Have To
When it comes to planning for your death and incapacity, we handle the heavy lifting for you. This allows you to focus on your responsibilities to your family, your work, and yourself.
Once you’ve created your plan, you can rest easy knowing your wishes will be honored, your loved ones cared for, your property protected, and your plan updated throughout your lifetime.
And if you’ve already created your Life & Legacy Plan with us, keep an eye out for our reminders to review and update your plan. If you know you need to update your plan due to a life change, don’t hesitate to call us right away!
At Cheever Law, APC, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, starting with a valuable and educational Life & Legacy Planning Session. This will allow you to get more financially organized and make the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.
To learn more about our one-of-a-kind systems and services, contact us or schedule a no-obligation 15-minute introductory phone call today.