by Guest » Wed Jan 13, 2010 03:15 am
My stepfather died leaving his ex-wife as beneficiary (he never changed it to my mother as they were only married 4.5 months.)
However, the divorce decree clearly states that as part of the divorce the former wife has no rights to any life insurance policy.
So... would the policy end up being paid to his current wife (my mother) or the estate (of which my mother is the rep) or what?
Anyone? Thanks in advance.
However, the divorce decree clearly states that as part of the divorce the former wife has no rights to any life insurance policy.
So... would the policy end up being paid to his current wife (my mother) or the estate (of which my mother is the rep) or what?
Anyone? Thanks in advance.
Posted: Sun Apr 18, 2010 08:42 pm Post Subject:
Since ERISA is federal would it not trump a state law?
Posted: Wed Apr 21, 2010 02:12 am Post Subject: Update.
ERISA does indeed trump the state so the insurance company can go ahead and pay without recourse (as several here did advise) but the ex-wife keeping the money is another story. It's pretty much played out like the previous posters said.
There has been a suit filed and there is a restraining order on the funds so the insurance company has not paid out yet. If there is no settlement soon it will move to a federal court for some reason. I believe this is so the insurance company can get cleared to release the money to the ex-wife but I'm not sure.
I suppose of the ex-wife was denied the money by the insurance company she could go after them, but even if she got the money, she'd legally have no right to it so I'm not sure how that would work.
Basically the insurance company has a right to pay out the money to her, but she has no right to keep the money... at least in Michigan. Fun stuff. :P
Posted: Fri Apr 23, 2010 12:24 pm Post Subject:
u took any life police it will give u profit
Posted: Fri Apr 23, 2010 08:21 pm Post Subject:
Life insurance does not provide anyone a "profit". Life insurance provides funds following the death of the insured that the beneficiary may use to continue their own life with (ideally) minimal financial impact.
Traditionally, life insurance proceeds were supposed to represent the lost future income of the decedent. No amount of money can make up for the emotional loss of companionship or nurturing that results from the death of an individual. Other, perhaps even more pressing, issues concerning payment of taxes due at death are also a valid use of life insurance today (and will be especially true beginning 1-1-2011, after the unlimited estate tax exemption returns to the $1,000,000 level as the Obama administration is strongly suggesting).
Confusion, however, about insurance and profits has arisen in the last 20-30 years, with the arrival and spread of universal and variable life products. Many agents misrepresent these policies as "investments" when they are not. Because they are misrepresented as such, people believe that the products are intended to provide a profit, which is just not true.
Can a variable policy provide a good/better rate of return compared to a universal or "plain-vanilla" whole life policy? Certainly. And they can also crash and burn. Can a universal life policy collapse even though the insured has been dutifully paying premiums for 20 years? Absolutely. Will a person who buys term life insurance and dies two days after the end of the term leave a death benefit behind? Absolutely not.
Some agents do a terrible disservice to their clients when they talk up the "tax free" aspects of borrowing money from a cash value policy in later years, leaving some clients with the impression that life insurance is more important than saving money for retirement in a 401(k) plan, an IRA/Roth IRA, or other tax-advantaged qualified plan. Some have even convinced clients to stop funding those plans and dump the money into a VUL policy instead. Dreadful.
So, no, "u took any life police it will give u profit" is a complete misunderstanding of the products.
And I wish posters would stop using this site as if it were a text messaging forum. U no who U R.
Posted: Mon May 17, 2010 12:06 pm Post Subject: want to know about anything
I want to know about life insurance plz reply me
(Promotional links removed as per TOU)
Posted: Mon May 17, 2010 03:20 pm Post Subject:
What would you like to know?
There are textbooks full of information on the topic in addition to all the actual field experience those of us on this forum who have worked in the industry will be willing to share.
It appears that you are in India, where some of our American concepts may not be entirely applicable.
Posted: Mon May 17, 2010 04:10 pm Post Subject:
In doing some research last week on the topic of divorce decrees and life insurance proceeds between ex- and current wives and children for the revised edition of a textbook for life insurance Continuing Education, entitled "Problematic Beneficiary Designations", that I've been asked to update in part, I ran across an interesting US Supreme Court decision concerning ERISA-governed group life insurance policies.
The case is Egelhoff v Egelhoff (532 U.S. 141 [2001]). The case is distinctive because it was a 7-2 decision in which the the high Court seemed to both affirm and contradict some its earlier positions.
In the matter before the Court, Mr. and Mr. Egelhoff, residents of Washington state, were legally divorced in 1994. Two months later, Mr. Egelhoff was killed in a traffic collision. In addition to the ex-wife, he also left two children from his first marriage.
Washington state is one of the dozen or so with laws that terminate a spouse as beneficiary immediately upon the divorce judgment. The theory is the marriage is dead, the spouse beneficiary is dead -- similar to voiding an insurance contract -- if nothing legally existed, there is nothing to make a claim against.
Mr. Egelhoff did not make any effort to change the beneficiary statement on his employer-sponsored group life or retirement plan in the two months before he passed away.
The most recent Mrs. Egelhoff, as named beneficiary, presented her claim for the life insurance proceeds. The two children filed a claim on the basis of Washington law (Wash. Rev. Code § 11.07.010(2)(a) [1994]), alleging that as the divorced spouse, she was no longer the beneficiary de facto.
Following its contractual obligation, the insurance company paid the $46,000 proceeds to the named beneficiary, the most recent ex-Mrs. Egelhoff, and let the parties fight it out in court. The trial court and state appeals court ruled in favor of the ex-wife. The Washington state Supreme Court reversed in 1999. The matter then went to SCOTUS in the 2000 term, and the opinion was published in 2001.
Justice Thomas wrote the majority opinion of the Court which what joined by all except Justices Breyer and Stevens, who dissented. Justice Scalia wrote a separate concurring opinion joined by Justice Ginsburg.
It was the opinion of the Court that because this was an employee benefit, the life insurance policy was governed under ERISA which, according to the supremacy clause of the Constitution, supercedes conflicting state law.
Essentially, the Court said, if this had been a personal life insurance policy, state law would indeed have invalidated the ex-wife's claim to the proceeds. But under ERISA, the only way to remove the ex-wife was to have changed the beneficiary designation on the policy, which Mr. Egelhoff was free to do the day the divorce was granted. But apparently he made no effort to do so, which the Justices interpreted to mean he must not have wanted anyone else to be the beneficiary or he would have changed it, and the high Court ruled that the named beneficiary was entitled to the proceeds. They sent the case back to the state trial court for adjudication "not inconsistent" with the opinion of the Supreme Court.
So, on the basis of this case (I did not find any similar cases later than this one), the heart of the matter is a distinction between personal and employer-sponsored life insurance. Personal policies are governed under state law, and employer-sponsored plans are governed under ERISA (when there are more than 20 full-time employees or equivalent).
ERISA is clear, regardless of prior beneficiary designations, the most current spouse is automatically the de facto beneficiary of life insurance and retirement plans provided in the workplace, in the absence of that person's affirmative disclaiming of the right (the spouse must agree to sign-off as the beneficiary rather than sign-on).
The hardest thing for anyone to do following the death of a person, whether they leave a will or not, is to read the mind of the dead person. Seances have yet to be held admissible in court. The deceased Mr. Egelhoff may have wanted the proceeds to go to his children, but he did not do anything affirmative to make that happen. So whether he would have wanted the money to go to the ex- or not, that's where it ended up and no one could take it away from her.
For insureds/policyowners, the matter is also clear. You must make valid beneficiary designations from the very beginning, and they should be reviewed and updated as often as necessary, which really means after every "life event" -- birth, death, marriage, divorce, adoption, business startup, business termination, change in employment, and so on. No specific order of events, no specific time period (but annually might not be a bad idea, if not more often). Not just life insurance, but retirement accounts, IRAs, and other such assets that permit naming a beneficiary. Everything else needs to be discussed in documents known as wills or trusts. You cannot leave anything undone!!
Posted: Fri May 21, 2010 06:41 pm Post Subject: pension
si estoy divorciada legalmente y mi ex se jubila, me tiene que dar parte de su pension?
Posted: Sun Jul 11, 2010 08:14 pm Post Subject: Beneficiaries
SO what if your the new wife and the ex has a minor child that your new husband is paying child support for and the divorce degree states she is the beneficiary if there are minors in the home, but he has changed the beneficiary on the paperwork on the life insurance company. Does she still have say in the monies? or Do we need to amend the divorce papers?
Posted: Mon Jul 12, 2010 04:19 am Post Subject:
A court order may have an effect on the right to claim the money, but it cannot force the insurance company to pay the money to someone other than the named beneficiary, if there is one.
Prior to the death of the insured, the person with the court order could take it to the insurance company and ask, "Does the policy match this court order?" If it does not, then the person with the order can march back into court and claim that the order is being violated, which has its own set of legal ramifications.
If an insured fails to follow a court order, subsequently dies, and has not changed a beneficiary designation to match the court order resulting in a payment of policy proceeds to the named, but improperly named, beneficiary, the person with the court order now has a separate claim against the beneficiary who received the money.
While they would probably win the case, collecting the money is a whole different matter.
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