Mrs. B. B. Sapp 

Director.and Executive Secretary 

Teacher Retirement System of Texas 

Austin, Texas 

Dear Mrs. Sappr Opinion Nmber O-5126 

Re: Payment of contributions of deoeassd member where benefioiary designated inwill is different from 

benefiaiary designated on regularform. 

lYe have received your letter of Harch 12, 1943, which we quote in part 

as follcws, 

"The Teacher Retirmnent System of Texas respectfully requests an opinion from 

ycur Department on the following matter: 

"If a member who has on regular form filed in this offiae designated a beneficiary to receive her aocmnulated contributions in case of death and in a subsequent will specifies another individual to receive the said ccntributions 

from the Teacher Retirement System, what would be the aorreot legal procedure 

for the Teacher Retirement System to fcllcw in disposing of the aocmulated 

contributions of said member?” 

Subsection 5, Section 5 of the Teacher Retirement Act (ktiole 2922-1, 

Vernon's Annotated Civil Statute8) reads in part as follows: 

"Should a member cease to bs a teacher except by death or retirement under 

the provisions of this Act, he shall be paid in full the amount of the PCcumulated contributions standing to the credit of his individual acaount in 

the Teacher Saving Fund. Should a memver die before retirement, the amount 

of h$.s accumulated contributions standingto ths credit of b.is individual account shall be paid as provided by the laws of desoent and distribution of 

Texas unless he has direoted the account to be paid otherwise. . . ." 

You have supplied us with additional information as fcllcws: 

The original beneficiary named predeceased the member, end the member 

drew her will three days before she (the member) died. The will has been 

probated, and a aertified copy thereof has been furnished you. The original 

designation pias made on a form adopted by the Retirement System which contains 

the following provisioner 
- . 

Mrs. B. B. Sapp, Page 2 (O-5126) 

"I hereby designate 

(First given name) (Second given name) (Last name) 

(Aeel (Relationship) (Address) 

as my beneficiary to receive my accumulated contributions in the Teacher Saving Fund of the Teacher Retirement System in the event of my death before retirement. Should I, at scms future time, decide to have my accumulated contributions paid to scme one other than the party or person named above, I will 

make such change in writing upon a form prescribed by the System and file the 

same with the System, and it is my understanding that unless such change of 

beneficiary is filed at the office of the Teacher Retirement System at Austin, 

Texas, during my lifetime, it shall be void and of no effect. Should the 

beneficiary named above die before me, and I fail to name another, it is 

understood that my accumulated contri?uticns shall bs paid as provided by the 

laws of descent and distribution of Texas. 

(BAVE TV?G WITNESSES) 

(Signature of Rltness) (Member's Signature) 

(Signature of Wtness) 

Signed the day cf 

You wish to know (1) whether the contributions should be paid according 

to the laws of descent and distribution or to the person named in the will; 2nd 

(2) whether under the, quoted statute and the form adopted by the Retirement 

System the ccntributions of a deceassd member should be paid to a beneficiary 

in a will in the evant that both such persons are still living. 

Ppe havs answered the first cluesticn in Opinion Rc. o-2907. In that 

Opinion two members of the Retirsment System, who were sisters, designated 

each other as beneficiary. One sister died, but before her ocntributicns 

aculd be paid to her sister, the second sister died. The seccnd sister in 

her mill had provided that all of her "earthly goods" should go to another 

person. In Opinion Eb. O-2907 it was held that the will constituted a sufficient designation under the statute and that the contributions of both 

sisters should be paid to the person designated in the will of the second 

sister. 

In the situation under ccsideration the designation in the will was 

even more specific in that it was expressly stated that the contributions 

should be paid to the person named. In accordance with opinion NC. O-2907 

you are advised in answer to your first question that the contributions of 

the deceased member should be paid to the person named in the will. 
- 

. - 

Mrs. 2. B. Sapp, Page 3 (O-5126) 

The second point in whioh you are interested presents mars serious 

questions. In Opinion NC. O-2048 your department was advised that the general clause, "all property of whatsoever kind, real, personal or mixed of 

which I may dies possessed" is bequeathed to a named person, did not change 

the banefioiary named in the form on file in the cffioe of the Retirement 

system. But we said in that opinion: 

difficult if the will/%!d% 

"The question hare would bs muohmcre 

on executed subsequent to the original designation in the Teacher Retirement System had provided specifically that the 

accumulated contributions should be paid to someans other than the person 

designated in the form filed with the Teacher Retirement System." 

Fe have been unable to find any decisions which have passed upon this 

question, and a resort to analogous oases relating tc the payment cf insuranoe prcoeeds produces confusion rather than enlightenment. 

In the case of Grand Lodge, Knights and Daughters of Tabor, v. MannI 

282 S.W. 266, plaintiff had been named as beneficiary in a policy or oertificate of insurance, but at a later date the insuisd in a will had named other 

persons as beneficiaries. These other persons presented a certified copy of 

the will to defendant, snd it treated the instrument as a change of beneficiaries, and paid the amount of the oertifioate to such persons. The by-laws 

of the order provided that no change in the designation of beneficiaries 

should be effective until the old certificate had been received and a new 

and issued during the lifetime of the member, and until such time the criginal designation should remain in full force. Payment of a fee for such 

change wus also covered. The court in holding that a change of benoficiaries had been effected made the following statamentr 

"Our Supreme Court, in the case of Splawn v. Chow, 60 Tsx. 532, which holding 

has been a number of times reaffirmed since that deoisicn, has directly hold 

that such a provision in the by-laws of an insurance company, or other ocrpcraticn, as the one hre involved, is for the benefit and protection of the oompany alone, can be waived by it as it sees fit, and cannot be taken advantage 

of by others. In that case, as here, the change in beneficiaries was effected 

by the will of the insured, sndit was held that those designated took the 

benefits under the certificates rather than those designated as bsneficiarias 

in the certificate itself. 

"The trial court's judment ssems to rest upon the conclusion that the change 

in beneficiaries had not in fact been made during the lifetime of the member, 

tut this ~ecise question, too, had been decided the other way by the Kansas 

Court of Appeals in Heydcrf v. Ccnrack, reported in 52 P. page 700, 7 Kan. 

App. 202, under facts not in legal effect different frcm those here obtaining; 

that is, a member of the order having, during his lifetime, made a request for 

a change in beneficiaries in substantial aoocrd with the contract between himself and the order in that respect, the designation so made of a nsw beneficiary 

was held not void by reason of the member's death prior to the granting of the 

same by the insurer. To the same effect appears to be the holding in Luhrs V~ 

Luhrs, 25 N. E. 366, 123 R. Y. 367, 9 L.R.A. 634, 20 Am. St. Rep. 754." 
es. B. B. Sapp, Page 4 (O-5126) 

See also Richardson v. Faithful, 289 S.W. 10543 MaNeill v. Chinn, 101 S.W. 

46.5~ BLlls v. Bills at al., 207 S.W. 614. 

Hcwsver, a rscent'decisicn of the Conrmissicn of Appeals and adopted by 

the Supreme Court might pcssibley be considered as in ocnfliot rdth the Vann 

case. In the case of Garabrant v. Burns, et al., 111 S.W. (2d) 1100, it was 

held that the beneficiary named in the policy has a right to require that a 

change of beneficiaries be made substantially in aocordanw with the rsgulaticns or manner provided in the pclioy, that the change may be made in nc 

other way, and that a substantial compliance therewith was necessary tc sffoot 

the change. While a distinction is attempted to bo drawn between the prinoipal oaso and the Vann case, such distinction is not very clear in respect to 

the question under ocnsideraticn. 

See also: Wright v. Wright (W. E. Ref.), 44 S.W. (2d) 1019; Groat 

Southern Life Ins. Cc. v. &kill (Dism. Judgm. Car.), 151 S. 

Kelly v. McDonald, (W.E. Dims.), 83 S.W. (2d) 414; Adams V* ILzZd!W2’Dism ) 

78 S.W. (2d) 6641 Beck v. Beck, 90,S.W. (2d) 284; Brown v. Union Life Ins. Ci.' 

et al., 72 S.W. (2d) 661; Korens Nat. Bank et al., v. Stockton, et alo, 40 

S.W. (2d) 7. 

Wore wo called on to decide whether the Vann oass or the Burns case controlled the question under consideration, ww believs that ws would be inclined 

tcdeoide that the Vann case is applicable. In the first place, the State 

Board of Trustees derives its duties and powers from the Retirement Act. The 

only provision relating to the designation of beneficiaries to whom the aoounulated contributions of a msmber shall be paid upon the death of such member 

is: ". . . unless ho has directed the account to be paid cthsrwiss." Can the 

Board of Trustees impose duties mars onerous than the ones which the statute 

itself impcsesl The Retirement Act is for ths benefit of the teachers, as 

defined therein, and should be construed SC as to effect this purpose. The 

Retirement Board of Trustees is under no duty to beneficiaries except to see 

that the designation of the member, if made in accordance with the terms of 

the Retirement A at, is carried cut. Of ocurss, the Board of Trustees may 

make reasonable requirements SC as to satisfy itself that the designation is 

genuine. Such would be necessarily implied. 

Inc. v. Sheppard, 83 S W. (2d) 660. 

See Fort Worth Cavalry Club, 

We also thing that the Board may take 

any reasonable moans tc protect the System and its funds, and in cur opinion 

this is the object of ths beneficiary form adopted by the Board. In other 

words, the Board does not want to pay aoomnulated contributions to one person designated as beneficiary and later find cut that there was a later dssignaticn naming scmocne else. But it may bs a different thing when the 

Board is satisfiedthat a subsequent designation has been made, and is a 

genuine one, before the money is paid cut. 

The Retirement Aot set up forteachers in the City of Bsw York, ocnsidered bythe ocurt in the oass of Ward v. Teachsrs',Retiroment Board, 241 

N.Y. S. 535, rsv. 246 H.Y. S. 522, aff. 175 NT. E. 347, required that a designation of beneficiaries be acknowledged. In accordance with the terms of 
1 . - 

Mrs. B. B. Sapp, Page 5 (O-5126) 

the Act, the mm-t held that a designation not acknowledged was ineffective . Buttha aourt strongly intimPtsd that unless the Act itself required 

an acknowledgment, the designation would have been given effect. 

We are not definitely answering your second question for the reason 

that the matters inquired about are not before you at this time. We simply 

wanted to show you that the question is certainly not free from doubt. We 

suggest that a possible meplls of eliminating the ohanoe of such a situation 

confronting you is the addition of a provision to your adopted form to the 

effeot that these provisions relating to change of banefioiary are for the 

sole protection and benefit of the Tsaoher Retirement System and the Board 

of Trustees, and upon proof of a subsequent designation may be waived bythe 

Board of Trustees in its discretion, and only by the Poard of Trustees. 

Very truly yours 

ATTOEREYG~ERAL OFTEXAS 

By /s/George W. Sparks 

APPROVED MAR 24, 1943 

/s/ GRWER SELLERS 

iflET ASSISTANT 

ATTORNEY GElTERAL 

Gws-srsgw 

O.K. C.C.R. 

George W. Sparks 

Assistant 

APPROVED 

opinion cxmlittee 

By B.W.B. 

Chairman