Background
David Egelhoff named his wife as beneficiary of the life insurance and pension his employer provided, both governed by ERISA. They divorced, he did not change the designation, and he died just over two months later. His children from a prior marriage relied on a Washington statute that automatically revokes a spouse’s designation as beneficiary of a nonprobate asset, including life insurance, upon divorce.
What the Court held
The Supreme Court held that ERISA preempts the Washington statute as applied to ERISA plans. The statute required plan administrators to pay someone other than the beneficiary named in the plan documents and interfered with the uniform national administration ERISA is meant to provide. The ex-wife’s designation therefore stood.
Why it matters
Divorce does not automatically remove an ex-spouse from employer group life coverage governed by ERISA, even in states with revocation statutes, which still apply to many individual policies. The Court later reinforced this “plan documents” rule in Kennedy v. Plan Administrator for DuPont. Whether others can recover the money from the ex-spouse after payment is a separate question that varies by jurisdiction.
Read the opinion
Egelhoff v. Egelhoff, 532 U.S. 141 (2001) (Cornell LII).
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.