When you got divorced, did you remember to update your life insurance beneficiary? At Phinney Estate Law we regularly see cases where people have died with ex-spouses still named as their life insurance beneficiary, even when they have remarried. In cases were these are private insurance policies purchased from brokers or agents we can rely on Washington State statute that says such designations are invalid upon divorce to fix the problem. For those with policies that are are employee benefits the solution is not so simple as federal law often preempts state law.
In the most recent US Supreme Court decision on the topic, Hillman v. Maretta, the court awarded a deceased federal employee's life insurance to his ex-wife, instead of his current wife, even though his divorce decree stated that his ex-wife would have no claim to it and even though state statute in Virginia where he lived created a separate state cause of action to allow current spouses to collect from ex-spouses in such situations. In its decision the Supreme Court made it clear that Federal Employees Group Life Insurance Act (FEGIA) completely prempts state law on the matter of beneficiaries. Therefore, a deceased employees life insurance benefits will go where the beneficiary designation says they shall go, even if they is an ex-spouse, even if they are remarried, and even if state law says that such designations are invalid. Furthermore, any state law attempt to "fix" the problem by allowing a cause of action to get the money to the new spouse will be invalid.
The lesson is that if you have a divorce in your history, you need to make sure that you have made a new estate plan that reflects your current intentions. Do no rely on Washington State rules to do it for you or you may find that your ex-spouse gets more at your death than you imagined.
If you have been divorced and want to make sure you have done the necessary follow up work on your estate plan, please contact us for a free 1/2 hour consultation at info@phinneyestatelaw.com or (206) 459-1908.
In the most recent US Supreme Court decision on the topic, Hillman v. Maretta, the court awarded a deceased federal employee's life insurance to his ex-wife, instead of his current wife, even though his divorce decree stated that his ex-wife would have no claim to it and even though state statute in Virginia where he lived created a separate state cause of action to allow current spouses to collect from ex-spouses in such situations. In its decision the Supreme Court made it clear that Federal Employees Group Life Insurance Act (FEGIA) completely prempts state law on the matter of beneficiaries. Therefore, a deceased employees life insurance benefits will go where the beneficiary designation says they shall go, even if they is an ex-spouse, even if they are remarried, and even if state law says that such designations are invalid. Furthermore, any state law attempt to "fix" the problem by allowing a cause of action to get the money to the new spouse will be invalid.
The lesson is that if you have a divorce in your history, you need to make sure that you have made a new estate plan that reflects your current intentions. Do no rely on Washington State rules to do it for you or you may find that your ex-spouse gets more at your death than you imagined.
If you have been divorced and want to make sure you have done the necessary follow up work on your estate plan, please contact us for a free 1/2 hour consultation at info@phinneyestatelaw.com or (206) 459-1908.
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