Tuesday, June 18, 2013

The Ex Spouse Gets The Money

The Ex Spouse Gets The Money

WASHINGTON (AP) - The Supreme Court says a Virginia law can't override a federal employee's decision to make his ex-wife, not his wife, his beneficiary in a federal insurance program.

Warren Hillman made Judy Maretta beneficiary of his Federal Employees' Group Life Insurance policy before their divorce and his re-marriage to Jacqueline Hillman. He never changed his beneficiary designation, and Maretta got the money after his death.

The second wife sued, but the Virginia Supreme Court said the first wife gets the money since her name was on the form.

Virginia law revokes a beneficiary designation in favor of the current spouse. But Maretta argued it was pre-empted by federal law saying named beneficiaries get the money.

The high court agreed in a unanimous judgment.
This actually happens more than most people realize.  We see it with some regularity on group life insurance that is part of an employers benefit package.   An employee puts his wife as beneficiary and later divorces never thinking to notify his employer to change his life insurance policy.

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