Avoiding a Beneficiary Designation Snafu: Lessons from a $750,000 Estate Battle in Ohio

For planning seniors, ensuring their assets pass smoothly and reliably to loved ones is a cornerstone of peace of mind. A recent legal battle over a retirement account in Ohio, Rolison v. Procter & Gamble, (reported by Wealth Management), serves as a stark reminder of how outdated beneficiary designations can derail even the best-laid estate plans. 

In Rolison,  an ex-girlfriend from 35 years ago stands to inherit over $750,000 due to a forgotten beneficiary designation.  The case underscores the risks of relying solely on beneficiary designations for assets like retirement accounts, life insurance, annuities, or bank accounts. At the Aging-in-Place Planning and Elder Law Blog, we advocate for trusts as a more reliable and flexible tool to protect your legacy, especially given the limitations and disadvantages of beneficiary designations, including their vulnerability to disputes and lack of evidence supporting your choices after your passing. At the end of this article, readers will find a list of just some of the articles on this blog warning about Direct Beneficiary Designations (beneficiary designations, TODs, and PODs).  This article explores the Rolison case, offers guidance to avoid similar pitfalls, and addresses broader concerns about beneficiary designations to help you plan effectively. 

The Rolison v. Procter & Gamble Case: A Costly Oversight

In 1987, Jeffrey Rolison, a Procter & Gamble (P&G) employee in Ohio, enrolled in the company’s profit-sharing and savings plans, naming his then-girlfriend, Margaret Losinger, as the beneficiary and “cohabitator.” The couple’s nine-year relationship ended acrimoniously two years later, with court documents citing infidelity and differing life goals—Margaret wanted marriage and children, while Jeffrey did not. Despite their breakup, Jeffrey never updated the beneficiary designation on his retirement plan. He continued working at P&G until his death in 2015 at age 59, leaving a retirement account worth over $750,000.

Jeffrey’s estate, representing his siblings, argued that he would have changed the beneficiary to a family member had he been properly informed that Margaret was still listed. They pointed out that Jeffrey updated beneficiaries on other accounts, such as removing a later partner, Mary Lou Murray, from his life insurance policy after their split. P&G countered that they notified Jeffrey multiple times about his beneficiary options, including when the plan switched service providers, and that his handwritten designation from 1987 remained valid because he never updated it online or otherwise.

The court sided with P&G, ruling that under the Employee Retirement Income Security Act (ERISA), which governs such plans, the beneficiary designation on record controls, regardless of Jeffrey’s presumed intent. The estate’s appeal is pending, but experts like Denise Appleby, CEO of Appleby Retirement Consulting, believe Margaret will likely keep the funds because Jeffrey was unmarried at death and she remained the designated beneficiary. Simply, ERISA was drafted in favor of plan custodians, to limit their responsibilities and liabilities when distributing assets to beneficiaries.

One of the challenges beneficiary designations present is that there is typically little in the way of supporting legal documentation or evidence. If Jeffrey presented a change of beneficiary form to an employee of the P&G Human Resources department, and it was lost or mishandled, Jeffrey's family would be totally incapable of proving responsibility since the document was never available to him or them. If, the custodian of the retirement plan received the document, but mishandled or lost the document, P&G might have maintained a copy, but Jeffrey's family would still be unable to establish delivery to the plan custodian, and ERISA places responsibility upon the account holder by requiring distribution to the beneficiary properly designated rather than the beneficiary Jeffrey intended. While some companies send a letter confirming a change in beneficiary, there can be no notification of an act that is never prosecuted properly.

This case highlights two common estate planning mistakes: failing to update beneficiary designations after major life events and relying upon "simple" and "cheap" planning alternatives such as beneficiary designations. For seniors in Ohio and beyond, these mistakes can result in unintended recipients, such as an ex-partner, receiving significant assets, leaving intended heirs with nothing.

Guidance to Avoid a Similar Snafu

To prevent a situation like Jeffrey Rolison’s, where an outdated beneficiary designation caused a legal battle, follow these steps to protect your assets and ensure your wishes are honored:

1. Use Trusts as Beneficiaries:
   • Better Planning: Naming a trust as the beneficiary of your retirement accounts, life insurance, or other assets provides greater planning, control, and protection than is possible with most beneficiary designations. For example, a trust can dictate how funds are distributed (e.g., over time to minor children) and include spendthrift provisions to shield assets from creditors, Medicaid eligibility challenges, or estate recovery. Planning in a trust can address the parties' competency and incapacity. This aligns with our blog’s preference for trusts over standalone designations. A Trust can and almost always plan for foreseeable events, such as the separation, termination, or dissolution of a relationship or marriage, directing a trustee appropriately without the need to change the estate plan as conditions change.
• Easier to Maintain: Using a trust means that future changes are easier; one need make only one change to the trust, rather than prosecuting beneficiary change forms with multiple companies, agents, and custodians, each with a separate risk of mishandling, loss, or mistake.

• Easier to Support and Enforce: Trusts and amendments to trusts are better supported by documentation/evidence and resulting evidence, since they are prepared by or through attorneys, and typically executed by or through attorneys and independent notaries or witnesses. Moreover, they typically include "No Contest Clauses." Beneficiary designations may be processed with a few clicks on a computer, with little documentation or support, and are almost always contestable.

• The Rollyson Example:
  In Rolison, naming a trust as beneficiary could have ensured Jeffrey’s assets went to his intended heirs, like his siblings, with clear instructions.

1. Review Beneficiary Designations Regularly:
• Confirm Designations are Made: Check that beneficiary designations, on all "non-probate" assets—retirement accounts (e.g., 401(k)s, SEPs, IRAs), life insurance policies, annuities, bank accounts with payable-on-death (POD) or transfer-on-death (TOD) provisions—annually and after major life events like marriage, divorce, birth, or death. In Ohio, TOD designations for real estate are also available (Ohio Rev. Code § 5302.22), but they require similar vigilance, and are generally inadvisable in a well-planned estate (see below).

• Consider Planning Alignment: Confirm with your estate planning attorney and financial advisor that any and all designations align with your current wishes.

• Avoid Conflicts: Beneficiary designations override wills and trusts for specific assets. Ensure designations match your will or trust to avoid conflicts. For example, if your will leaves your IRA to your children but the IRA designation names an ex-spouse, the designation may prevail, but the conflict makes the estate plan vulnerable to contests and disputes.

• Document Your Intent: Keep records of your designation decisions, such as notes or emails to your advisor, to provide evidence of your intent if disputes arise post-mortem. In Ohio, courts may consider such evidence in rare cases where fraud or undue influence is alleged, even though plans governed by ERISA are harder to contest directly.

• Work with Experts: Work with an elder law or estate planning attorney to review designations and create a trust-based plan. Many people, like Jeffrey, are not counseled on the limitations or disadvantages of beneficiary designations, leading to unintended outcomes. Financial planners and insurance agents often invest too much in their own marketing; some assets, like annuities and life insurance, are marketed as "avoiding probate" which causes people to assume that beneficiary designations always work and never have disadvantages. An attorney can also ensure compliance with state and federal rules like ERISA.

• The Rollyson Example: Jeffrey’s failure to consider his estate plan or review and update his 1987 designation after his breakup with Margaret led to her potential windfall. J
  effrey’s estate struggled because there was no clear documentation proving he intended to remove Margaret, forcing the court to rely on the 1987 form.
1. Communicate with Loved Ones:
   • Inform family members or trusted individuals about your estate plan to reduce confusion or disputes. While Jeffrey’s siblings believed he wanted them to inherit, his failure to update his designation left them powerless.

Broader Concerns with Beneficiary Designations

While beneficiary designations are simple and might bypass probate when they work and are left uncontested, they come with significant limitations and risks, particularly for seniors planning to age in place. At the Aging-in-Place Planning and Elder Law Blog, we emphasize trusts as a superior alternative due to these concerns:

1. Limited Control and Flexibility:
   • Beneficiary designations offer little control over how assets are used after transfer. For example, naming a minor child as a beneficiary may require court-appointed guardianship in Ohio, as minors cannot directly receive funds. A trust, by contrast, can specify distributions over time, protecting young or financially inexperienced heirs.
   • In Rolison, a trust could have included provisions to distribute funds to Jeffrey’s siblings or other heirs, avoiding the ex-girlfriend’s claim.
2. Vulnerability to Contestability:
   • Contesting a beneficiary designation in Ohio is challenging, especially for ERISA-governed plans like 401(k)s. Courts typically uphold the designation on record unless fraud, undue influence, or lack of capacity is proven, which requires substantial evidence (e.g., handwriting analysis, advisor notes). After the account holder’s death, gathering such evidence is difficult, as seen in Rolison, where Jeffrey’s intent was speculative without documentation.
   • Trusts, when properly drafted, are harder to contest due to their detailed provisions and legal oversight during creation, offering greater certainty. Most trusts contain a strong In Terrorem
3. Lack of Evidentiary Support Post-Mortem:
   • Beneficiary designations, often completed on simple forms, lack the robust documentation of a trust or will. In Rolison, Jeffrey’s handwritten 1987 form provided no context for his intent decades later, leaving his estate with little to challenge Margaret’s claim.
   • Trusts allow settlors to articulate their intent clearly, with provisions like spendthrift clauses or conditions for distribution, reducing ambiguity. For Ohio seniors, trusts can also address aging-in-place planning and long-term care/Medicaid planning, ensuring assets are protected and utilized approprtately.
4. Inadequate Counseling:
   • Many individuals, like Jeffrey, are not informed about the limitations of beneficiary designations when opening accounts. Financial institutions often prioritize form completion over explaining long-term implications, such as ERISA’s precedence over state law or the need for updates after life events.
   • Elder law attorneys in Ohio can provide comprehensive counseling, integrating designations with trusts to align with aging-in-place goals, such as preserving a home for a surviving spouse or disabled child exempt from Medicaid recovery (42 U.S.C. § 1396p).
5. Risk of Unintended Recipients:
   • Outdated designations can direct assets to ex-spouses, former partners, or deceased individuals, as in Rolison. Ohio law does not automatically revoke designations upon divorce for ERISA plans (unlike some states for IRAs), making updates critical.
   • Trusts mitigate this risk by centralizing asset management and allowing the settlor to specify contingent beneficiaries or default distributions to the estate or charity.
6. No Protection from Creditors or Medicaid Recovery:
   • Beneficiary designations do not inherently protect assets from creditors or Medicaid estate recovery, a concern for Ohio seniors. Once assets pass to a beneficiary, they may be vulnerable to claims, such as in Plaisted v. Harper (S.D. Ohio 2025), where families faced aggressive Medicaid recovery tactics.
   • A properly structured irrevocable trust with a spendthrift provision can shield assets from creditors and recovery attempts, ensuring funds support aging-in-place needs.

Why Trusts Are the Preferred Solution

At the Aging-in-Place Planning and Elder Law Blog, we advocate for trusts over standalone beneficiary designations for their flexibility, protection, and clarity. Trusts offer:

• Control: Specify how and when assets are distributed (e.g., staggered payments to heirs or support for a disabled child).
• Protection: Spendthrift provisions safeguard assets from creditors or Medicaid recovery, critical for Ohio families under Ohio Rev. Code § 5162.21.
• Clarity: Detailed trust documents reduce contestability and provide evidence of intent, unlike sparse designation forms.
• Medicaid Planning: Irrevocable trusts can be structured to exclude assets from Medicaid eligibility calculations, preserving homes for aging in place.
• Avoiding Probate: Like designations, trusts bypass probate, but they offer greater oversight and customization.

For example, in Rolison, a trust naming Jeffrey’s siblings as beneficiaries could have avoided the ex-girlfriend’s claim, ensured clear distribution, and protected assets from potential claims. Trusts also allow for provisions requiring beneficiary cooperation (e.g., providing information to defend against Medicaid recovery), aligning with your prior interest in trust clauses for recalcitrant beneficiaries.

A Path to Secure Planning

The Rolison v. Procter & Gamble case is a cautionary tale for Ohio seniors and their families: a forgotten beneficiary designation can upend your estate plan, leaving assets to unintended recipients. By regularly reviewing designations, coordinating with your estate plan, and prioritizing trusts, you can avoid such pitfalls. Trusts offer unmatched flexibility, protection, and clarity, addressing the limitations of beneficiary designations—especially their vulnerability to disputes and lack of post-mortem evidence. For aging-in-place planning, trusts can also safeguard your home and assets from Medicaid recovery, ensuring your legacy supports your loved ones as intended.

Take action today:

• Review Designations: Check all accounts and policies with your financial advisor or attorney.
• Consult an Attorney: Work with an Ohio elder law attorney to create a trust that aligns with your goals and protects assetsagainst Medicaid recovery or creditor claims.
• Document Intent: Keep records of your planning decisions to support your wishes if challenged.
• Plan for Medicaid: Explore irrevocable trusts to preserve assets while qualifying for Medicaid, especially for long-term care needs.

Don’t let a simple oversight derail your legacy. Contact an elder law attorney to build a trust-based plan that ensures your assets pass to the right people, at the right time, with the protection you deserve.

For more information, please consider the following articles:

• Beware Direct Transfer Designations (TODs and PODs);
• Aging in Place Planning Heightens Necessity of Trust Funding;
• Beware Direct Transfer Designations (TODs and PODs)- Part II: Ohio Transfer of Death Designation Affidavit (TODDA) for Real Estate- Lapse of Insurance Coverage;
• Beware Direct Transfer Designations (TODs and PODs)- Part III- Transfer on Death Deed for Real Estate Results in Loss of Insurance Coverage and Impairment of Asset Value.   

To view my video. "Five Rock Solid Reasons to Avoid Direct Transfer Designations- TODs, PODs, and Beneficiary Designations, go here: