In Metropolitan Life Ins. v. Blevins, Judge Hood of the Eastern District of Michigan evaluated a dispute between a former spouse and a widow over ERISA life insurance benefits. The insurance company, Metlife, filed an interpleader after facing competing claims to the policy benefits.
The decedent, a long time employee of General Motors, had named his ex wife as beneficiary in 1977. They were divorced in 1992. The divorce decree provided that he would maintain the ex wife "as irrevocable beneficiary on all existing life, endowment or annuity policies of insurance" until their child reached age 19 1/2.
The decedent passed away in 2014. The widow argued that the beneficiary designation in favor of the ex wife was effectively superseded by the divorce decree. Her reasoning was that the decree provided that the ex wife was only entitled to benefits until the child reached the age condition, which had been met long ago.
Judge Hood agreed that the decree could preempt ERISA to the extent it was a Qualified Domestic Relations Order (QDRO). A QDRO must meet the following requirements:
1) the name and the last known mailing address, if any, of the participant and the name and mailing address of each alternate payee covered by the order;
2) the amount of percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined;
3) the number of payments or period to which such order applies, and
4) each plan to which such order applies.
Judge Hood found that the decree did qualify as a QDRO under a "substantial compliance" view. However, she ultimately ruled in favor in favor of the ex wife:
The express language of the Judgment of Divorce only states that the decedent “shall continue to name Plaintiff, LAURA G. BLEVINS, as irrevocable beneficiary on all existing life, endowment or annuity policies of insurance until the minor child of the parties reach the age of majority, graduate from high school, but in no [t] [sic] event past their 19 1/2 birthday.” This language only shows that the decedent maintain Leckemby as an irrevocable beneficiary until the youngest child reached the age of 19 1/2. The language was most likely intended to protect the minor children, but this language does not provide a clear intent to revoke the beneficiary status of Leckemby after the youngest child reached the age of 19 1/2.
Whether a divorce decree meets the requirements to qualify as a QDRO is highly fact intensive. If you are facing an ERISA beneficiary dispute, you should consult with an attorney experienced in handling these cases.