Professor’s Beneficiary Designation Enriches the Democratic Socialists of America

Here in Michigan, the mid-term elections have focused national attention on the candidates for the U.S. Senate. The Democratic candidate, Abdul El-Sayed, is portrayed as being aligned with the Democratic Socialists of America; he has vigorously denied that characterization.

This post examines a recent federal case that involves probate succession planning and a significant -perhaps unintended- windfall for the DSA. The case illustrates the importance of maintaining diligence in the creation and updating of an estate plan, including beneficiary designations.

How does the DSA factor into estate planning you ask? The political organization is a named defendant in a very interesting recently-concluded case from the United States District Court for the Southern District of New York. In the case, the DSA was deemed to be the successor to a long-defunct political organization that was designated as the sole beneficiary of a deceased professor’s retirement plan.

Professor David F. Greenberg taught sociology at NYU for decades. Well known for his radical socialism, he passed away two years ago at age 82 without any heirs at law. His parents were deceased and he had no children. Nor did Professor Greenberg leave a will, dying largely intestate. He did leave behind, however, retirement savings of well over $6 million.

In Michigan, retirement assets such as 401(k) or 403(b) plans and IRAs are routinely transferred at the participant’s death via a simple beneficiary designation form. At times, a plan participant designates their own estate as the ultimate contingent beneficiary.

In Professor Greenberg’s case, he designated his parents as the primary beneficiaries of his retirement assets. A political organization -the New American Movement- “or its successor” was his designated contingent beneficiary. Professor Greenberg’s estate was third in line to inherit his retirement savings.

At the time of the Professor’s death in 2024, both his parents were deceased, and the socialist New American Movement had been defunct for about 40-years. Professor Greenberg’s beneficiary designations -captured on the Plan’s original beneficiary form- had been in place since 1974.

In dealing with retirement assets, all questions and processing concerns are addressed to the Plan Administrator of a particular plan. In Professor Greenberg’s case, TIAA/CREF, the NYU Plan Administrator, easily traced the New American Movement’s demise in 1982 to its successor organization: the DSA. Professor Greenberg’s small fortune would be instrumental for funding the DSA’s far-left candidates.

Cue the lawyers. Apparently, the Plan Administrator’s decision to direct Professor Greenberg’s substantial retirement savings to the DSA did not sit well with his family. In fact, the Professor was well known and endeared to his family; he had two sisters who also both predeceased him. He was not estranged as one would expect in the case of intestacy. A beloved nephew of the deceased Professor sued the plan in federal court.

Typically, estate disputes are filed in the county probate court where the decedent resided at the time of death, or where assets are located after death. The Professor’s estate sued in federal court based on federal question jurisdiction. The case involved the application of a federal ERISA statute to the at-issue retirement assets.

In the Greenberg estate dispute, the federal court ruled in favor of the DSA, finding that the organization directly traced its roots to the NAM identified as a beneficiary on Professor Greenberg’s form. Apparently, since 1992, Greenberg was also a long-term dues-paying DSA member.

After his death, the Professor’s personal representative [and nephew] contacted TIAA/CREF requesting a hold be placed on the distribution of the assets. NYU also got in on the act, a federal case was raised, and the funds were essentially frozen for well over a year.

In deciding the case, the federal court recently held that the case hinged on whether the DSA qualified as a “successor” to NAM, the expressly designated beneficiary. The decedent’s nephew asserted that succession had to be established through a formal succession mechanism such as a statutory merger, novation, or conveyance. TIAA/CREF countered that “successor” should be afforded its ordinary meaning and that evidence adduced during discovery in the case showed a clear path of succession for this purpose.

In concluding that the DSA was the successor to NAM, the federal court resorted to the ordinary meaning of successor as set forth in Black’s Law Dictionary: “a successor is one who succeeds to the office, rights, responsibilities, or place of another; one who replaces or follows a predecessor.” Interestingly, the court noted that the formal meeting merging the two organizations took place in Detroit, MI, in March 1982.

This decision is quite interesting if you ever need a detailed history lesson about the origins of the DSA. Obviously, the court was persuaded by what it characterized as a wall of evidence proving that the DSA is the successor to the NAM and thus, the intended contingent beneficiary of Professor Greenberg’s millions; not the decedent’s own estate.

In the end, a settlement was reached at the conclusion of the case. In lieu of defending an appeal of its hard fought victory, the DSA dropped its demand that Professor Greenberg’s estate pay DSA’s legal fees which -no doubt- were in the six-figure range after discovery had been completed.

Professor Greenberg, an avowed radical socialist, diligently saved his earnings throughout the decades of his career, toiling as a professor of sociology at NYU. Who knew what his intentions were at the time of his death. Professor Greenberg’s nephew -the personal representative of his estate- recently described his uncle as very family oriented to the NYT.

With hindsight, it is impossible to tell whether Professor Greenberg would have been elated with the windfall he inadvertently bestowed upon the DSA at this time of intense political upheaval in our state and in our country. A case can be made that after 40-years, the professor had only a vague notion of how he, in fact, originally designated his beneficiaries. Perhaps he held some fuzzy memory that his life savings were earmarked for a political party dedicated to his radical political beliefs. His nephew, for one, would beg to differ, asserting he would have intended the funds to be transferred into the hands of his family.

Whatever may have been his mindset at the time of his death does not matter. The primary lesson of the Professor Greenberg case is: do not neglect any of your beneficiary designations. That includes any deferred compensation plans as well as annuities and life insurance policies.

Be proactive, especially in your later years, with a well-thought-out estate plan. Review your estate plan regularly and do not put off important changes to the plan.

Pledge to our readers: this blog post was written in its entirety by a human attorney; no part of this post was composed using an AI agent.

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