A recent decision from the Washington Court of Appeals, Miller v. Miller, No. 60564-3-II (Wash. Ct. App. June 23, 2026) (unpublished), serves as an important reminder that beneficiary designations can trump expectations after a divorce.
In Miller, a former spouse received a $373,000 retirement account because she remained the designated beneficiary on a 401(k)plan. The Court of Appeals, Division II held that federal law required that result and prevented the estate from recovering the funds through a post-distribution unjust enrichment claim.
The decision serves as a reminder that beneficiary designations matter, and failing to update them, including after a divorce, can have significant and irreversible consequences.
What Happened?
Kevin and Stephanie Miller divorced in 2019. During their marriage and before the divorce, Kevin named Stephanie as the beneficiary of his Boeing 401(k) retirement plan. Although the parties divorced, Kevin never changed the beneficiary designation.
When Kevin died in 2023, the retirement account was worth approximately $373,000. Because Stephanie remained the designated beneficiary, Fidelity, the plan administrator, distributed the account proceeds to her.
Kevin’s estate subsequently filed suit, arguing that Washington State’s revocation-on-divorce statute automatically terminated Stephanie’s right to receive those funds when the marriage ended. The estate sought to recover the retirement proceeds under a theory of unjust enrichment.
The trial court agreed and ordered Stephanie to return the money to the estate.
The Court of Appeals Reversed
The Court of Appeals, Division II reversed the trial court and held that Stephanie was entitled to keep the retirement account proceeds.
Although RCW 11.12.051 generally provides that a former spouse’s beneficiary designation is revoked upon divorce, the court concluded that federal law controlled the outcome because the retirement plan was governed by the Employee Retirement Income Security Act of 1974 (ERISA).
Why the Ex-Spouse Prevailed
ERISA governs many employer-sponsored retirement plans, including most 401(k) plans. One of ERISA’s core requirements is that plan administrators distribute benefits in accordance with the plan documents and beneficiary designations maintained by the plan.
At the time of Kevin’s death, Stephanie remained the beneficiary listed on the plan’s records. As a result, Fidelity was required to distribute the account proceeds to her.
The estate argued that Washington’s revocation-on-divorce statute automatically revoked Stephanie’s beneficiary status. The Court of Appeals rejected that argument, relying on long-established precedent holding that ERISA preempts conflicting state laws concerning the distribution of retirement benefits.
The court also rejected the estate’s attempt to recover the funds after distribution through an unjust enrichment claim. Because the plan correctly paid the designated beneficiary under federal law, the estate could not use a state-law equitable claim to reach a different result.
Why This Decision Matters
The case highlights a common and costly misconception: many people assume that a divorce automatically removes a former spouse as a beneficiary on all assets. In reality, beneficiary designations often require separate action.
For ERISA-governed retirement plans, the beneficiary designation on file may determine who receives the account regardless of the parties’ subsequent divorce. As Miller demonstrates, a failure to update those designations can result in substantial assets passing to a former spouse, even where that outcome may not reflect the decedent’s likely intent.
The decision is also significant for fiduciaries and litigators. Miller reinforces that ERISA preemption remains a formidable obstacle to state-law claims involving retirement benefits. Efforts to recover plan proceeds through theories such as unjust enrichment may fail where the benefits were distributed in accordance with the governing plan documents.
Practice Tip
For practitioners, Miller underscores the importance of identifying at the outset whether a disputed asset is governed by ERISA. That determination may be outcome-determinative.
For individuals, the lesson is equally clear: beneficiary designations should be reviewed and updated following major life events, particularly divorce, remarriage, or the birth of children. Wills and trusts are important, but they do not necessarily control assets that pass by beneficiary designation.
Facing a Trust or Estate Dispute?
Disputes over beneficiary designations, retirement accounts, and nonprobate assets frequently arise after a loved one’s death. Stokes Lawrence’s Trust and Estate Litigation Team represents personal representatives, trustees, beneficiaries, and heirs in complex trust and estate disputes throughout Washington State. If you are involved in a dispute concerning the distribution of estate assets, we are available to evaluate your claims and help protect your interests.
Disclaimer. This article is provided for general informational purposes only and does not constitute legal advice or a legal opinion. Every matter is different, and case outcomes depend on the specific facts and circumstances of each situation. Although Stokes Lawrence, P.S., strives to ensure the accuracy of the information presented, the law is continually evolving, and the information contained herein may not reflect the most recent legal developments or the current state of the law. You should consult competent legal counsel licensed in the appropriate jurisdiction regarding your particular circumstances. Reading, accessing, or relying on this article or website does not create an attorney-client relationship with Stokes Lawrence, P.S.
