May It Please The Court: Weblog of legal news and observations, including a quote of the day and daily updates

Skip To Content

MIPTC Author:

Bookstore:



Listed in Latino Who's Who, June 2014
 Attorney
Categories [more]
General (1976)
Lawyer 2 Lawyer (285)
Latest Blogs
This Month's Posts [more]
S
M
T
W
T
F
S
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Links of Interest [more]
Locations of visitors to this page



Creative Commons License
This work is licensed under a Creative Commons License.



law-blogs.net


Quote of the Day - Live life so completely that when death comes to you like a thief in the night, there will be nothing left for him to steal. - Unknown
Adjust font size: A A+ A++
Claim Your Profile on Avvo
An Affiliate of the Law.com Network

From the Law.com Newswire

Sign up to receive Legal Blog Watch by email
View a Sample

Dividing Up Life Insurance Without Directions From The Insured

Law and life often collide.  This collision frequently results in confusion that requires the intervention of lawyers, and sometimes courts.  If the situations people created were black and white, then we wouldn't need advisers or deciders.  Let me illustrate.

We're greeted with the dilemma created by Scott Parker, now deceased.  Scott worked at the Bank of America, and had life insurance of just over $450,000.00  Scott was survived by Anita Pietrofitta, his widow; Eileen Marrero, his ex-wife and  Zachary Dry, a son born to a third woman five months after Parker died, here represented by the Estate of Scott Parker. 

Yes, if you're wondering, Scott filled out a beneficiary designation form for his life insurance, but made the cryptic designation "ES" (an estate designation) "according to the terms of my will."  He didn't specify an individual like the form required. 

Let's introduce the next stop in our problem.  As you can see from the description of the parties, Scott got divorced.  And if you guessed that he made his will during his first marriage and then after his divorce, forgot to change it, you'd be right.  Under the will, then, Scott's ex-wife gets everything.   

But we're not done yet - there's one more wrinkle.  Scott's life insurance was governed by ERISA, and there were two ERISA plans in effect during the time that Scott was insured, and it's far from clear which plan governed at his death.  If Scott's beneficiary designation is determined to be invalid, then one of the plans deems the beneficiary to be his widow and the other plan deems the beneficiary to be the estate, which means the money would go to Scott's son.  Side note here by the Court for ERISA administrators:  don't accept beneficiary designation forms that fail to name an individual.  If they had made Scott fill in a name, you wouldn't be reading this post.

How would you sort through this mess?

Let's add in a little law, and one or two more facts.  Scott resided in Arizona, which according to the Ninth Circuit opinion has a divorce revocation law that automatically revokes wills that leave money to the ex-spouse.  That law conveniently cuts our problem by one-third, eliminating the ex-wife from collecting anything.  Now, however, we're left with two competing claimants:  the widow and the son of the third woman and Scott.

ERISA requires that beneficiary designations be a person, not an undescribed entity.  Here, although Scott's will created a "person" by drafting a will, given the divorce revocation law, Scott died intestate, without a will.   So, we have to turn to ERISA for guidance.  We know that there are two competing plans directing the money two different ways, so who wins?

You'll have to stay tuned for the result on this one.  The Ninth Circuit punted it back to the trial court to determine which ERISA plan was in effect at the time of Scott's death, which will determine who gets the money:  his widow or his out-of-marriage son.

Now that you've got all but one fact, who would you give the money to?

Podcast 

Printer friendly page Permalink Email to a friend Posted by J. Craig Williams on Friday, February 10, 2006 at 11:38 Comments Closed (0) |
 
Share Link  

 


  Text-Only Site