Kramer Law on Former Spouse Pension

"FORMER" SPOUSE GETS PENSIONS, INSURANCE

Where a husband never replaced his former wife as the beneficiary of his life insurance and pension plans, she is entitled to the benefits, said the U.S. Supreme Court. This is true despite a Washington State Law that revokes beneficiary designations after a divorce. The state law is preempted by Federal Law, ERISA (Employee Retirement Income Security Act). This ruling sends a strong warning to couples in second and third marriages to carefully review their beneficiary designations and document the fact that they did so. Seventeen other states have similar "divorce revocation" statutes, according to Court briefs. The case sends a strong warning to divorce lawyers that they should always advise clients to change their beneficiary designations, and document the fact that they did so. "Divorce happens a lot, and people assume it's enough if a divorce decree says the husband will get his pension, but it's not," said Washington attorney Thomas Goldstein. The ruling could apply to any employer-sponsored benefit plan, including:

  • 401(k) plans;
  • severance plans;
  • employee savings accounts

This decision is yet another reminder to review your estate planning documents.

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