Technically it is not a tax case, but it is so tax-adjacent it might as well be.
Let’s talk about beneficiaries on a retirement account – and, more specifically, an employer-sponsored retirement account.
Carl Kleinfeldt participated in the Packaging Corporation of America (PCA) Thrift Plan for Hourly Employees. In 2006 he designated his (then) wife – Dena Langdon – as his primary beneficiary.
Kleinfeldt and Langdon divorced in 2022. The divorce included a Qualified Domestic Relations Order (QDRO). A QDRO is a court order authorizing distribution to the nonparticipating (ex) spouse. The PCA Benefits Center distributed to Langdon as directed.
However, even after the QDRO there is one more step: has the ex-spouse been formally removed as beneficiary?
Kleinfeldt faxed a request to the Benefits Center to remove Langdon from both his health and life insurance as well as his retirement plan. The Benefits Center updated her status on the retirement account to “ex-spouse.” Mind you, this was not the same as removing her as a beneficiary altogether.
Why not?
There were written plan procedures to follow. Kleinfeldt’s fax was a good start but was not quite enough.
You can guess that Kleinfeldt died.
You know that Langdon wanted that retirement money.
You also know the matter went to court.
And we are in legal weeds immediately.
We are talking here about an employer-sponsored plan, which (almost always) makes the plan subject to ERISA.
ERISA in turn uses a “substantial compliance” doctrine when reviewing actions required under a plan document. It is what it sounds like: if you miss a minor clerical step, the law presumes that responsible parties know what was meant and are expected to act accordingly.
The Kleinfeldt Estate argued the substantial compliance doctrine with a white-knuckle grip.
The Court observed that substantial compliance has two steps:
- Was there intent to make the change?
- Was the attempt to make the change similar (in all material aspects) to the proper procedures required by the plan?
There was no argument about the first test: the fax was clear evidence that Kleinfeldt intended to remove Langdon as a beneficiary.
On to the second test.
The plan documents wanted Kleinfeldt to either (1) call the Benefits Center or (2) update his beneficiary designation online.
The plan documents nowhere stated that he could update beneficiaries by fax.
The Court did not consider this a minor clerical step.
Kleinfeldt did not follow the rules.
Meaning that Langdon won.
And fair had nothing to do with it.
Our case this time was Packaging Corporation of America Thrift Plan v Langdon, No 25-1859 (7th Cir. Feb. 2, 2026)
