Supreme Court Upholds Right of Ex-Wife in Life Insurance Benefits Battle

10:15 pm Estate Planning

Oops 150x122 Supreme Court Upholds Right of Ex Wife in Life Insurance Benefits BattleWarren Hillman died in 2008, leaving among other assets a life insurance policy worth $125,000 that his ex-wife and widow have been fighting over since his passing.  Last week, the Supreme Court ruled in Hillman v. Maretta that the ex-wife was entitled to receive all the policy benefits because Warren made a very common estate planning error: he forgot to change his beneficiary designation.

Warren and his ex-wife had been divorced for a decade before he died.  He had named his ex as beneficiary on his policy, which he received as a federal government employee, in 1996.  A year later, he retired from his government job and started his own consulting firm.  He divorced Maretta in 1998 and remarried in 2002.

Hillman lived in Virginia, which has a law that protects its citizens from such oversights.  However, since Hillman’s policy was part of a life insurance program for federal employees, federal law governed in this case.  The U.S. Supreme Court unanimously found that federal law preempts state law, so Hillman’s benefits went to the person named as beneficiary:  his ex-wife.

The lesson here is simple: whenever a life change like a divorce or remarriage occurs, be sure to update your beneficiary forms.  This is the safest way to ensure the person or people you intend to inherit your benefits receives them.

To ensure you don’t make one of many common estate planning errors, contact our Orange County law firm.

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