If clients need a nudge to update their account beneficiaries, advisors might point to a lawsuit filed against Fidelity Investments last week.
A recent widow, Leslie McCarthy, sued Fidelity and her late husband’s daughter in Massachusetts Superior Court over the beneficiary designation on his investment account with the financial services company.
McCarthy contends that her husband, Raymond McCarthy, with whom she lived for years and married in a hospital in March — 13 days before he died — intended to share the account with her but never changed the beneficiary designation.
“Before and during their marriage, Raymond McCarthy promised to share the Fidelity Account funds with the Plaintiff for their mutual benefit, as their retirement account. In reliance upon Raymond McCarthy's promise and their agreement to share the funds in the Fidelity Account, Leslie McCarthy used her own funds to purchase a marital home in both of their names,” the lawsuit states.
“Despite Raymond McCarthy's expressed intent, he failed to change the beneficiary designation on the Fidelity Account,” leaving his daughter, also a defendant in the case, as the named beneficiary, the complaint says. The daughter “stands to receive the funds upon distribution, leaving Leslie McCarthy with little to no money for her retirement, which was not Raymond McCarthy's intent.”
Leslie McCarthy, who now lives in Milford, Connecticut, says that she and Raymond McCarthy started dating in 2009, moved in together in 2017, called off marriage plans around 2019, remained friends and got back together in 2021, the complaint states. In 2022, he moved into her home in Woonsocket, Rhode Island, and sold his home in nearby Pawtucket, according to the lawsuit.
“Raymond was unemployed, so Leslie paid for the mortgage, utilities, condominium fees and other household expenses,” it says.
Raymond placed the proceeds from his home sale into a Fidelity investment account, which is valued at over $100,000, the complaint states.
After Leslie suffered serious health issues in 2023, Raymond asked her to take an early pension and not return to work, the suit says. Her pension was $2,300 per month, and she wasn’t eligible to apply until August 2024, it says.
“Raymond promised to support Leslie by using the funds in the Fidelity Account, which both Raymond and Leslie referred to as their retirement account,” the lawsuit contends.
“Raymond explicitly promised Leslie that the funds in the Fidelity Account would be shared with her for their mutual benefit, including financial security. At the time, Raymond's employment was inconsistent, so Leslie continued to pay the mortgage and other household bills, rather than deplete the funds in the Fidelity Account. The Fidelity Account was left untouched because it was for their retirement,” the complaint states.
She sold her Rhode Island condo and purchased a condo with Raymond in Massachusetts in March, according to the suit, which says that they had planned to marry before the condo purchase but didn’t “for various reasons.”
Relying on Raymond's promise that the funds in the Fidelity account were to be shared between him and Leslie, she “used the entire amount of the net proceeds from the sale of her home” to help buy the $362,500 Lowell condominium for her and Raymond, gifting him nearly $138,000 toward the purchase, the suit contends.
The couple planned to live off Leslie's pension, Raymond's Social Security and the Fidelity funds during their retirement, with the Fidelity funds “their shared retirement account,” the suit says. Raymond died April 6 after suffering a stroke, the suit says.
“Leslie and Raymond got married on March 22, 2025, while Raymond was in the hospital. The Chaplain asked Raymond why he wanted to marry Leslie, now, while in the hospital, and Raymond responded: ‘I love her. She is my person and I am hers. We want to spend the rest of our lives together, and if something happens to me, I want to make sure Leslie is taken care of,’” the suit states.
Leslie learned after Raymond’s death that he hadn’t changed the beneficiary designation, the suit says, contending that if Leslie hadn’t used her condo sale proceeds to buy the condo with Raymond, the Fidelity account would have been reduced by nearly half to help pay for the home.
Allowing Raymond’s daughter to keep all the funds “would contravene Raymond's promise and mutual understanding with Leslie," the complaint says, contending that the relationship and marriage imposed "a duty on Raymond to honor his promise and agreement regarding the Fidelity Account." Among other requests, she asks the court to order Fidelity to distribute the funds to her or hold them in trust pending the matter’s resolution.
Fidelity didn't immediately respond to emailed requests for comment.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.