Supreme Court Hears Case on Whether Widow or Ex-Wife Gets Inheritance

Last week on the blog, we wrote about how it was important for people to whom you were leaving items actually wanted them. The flip side of that, of course, is making sure that the person you intend to get something in your will indeed receives it. This is why it’s important to revisit estate planning after a major event such as a divorce or remarriage.

A case was heard recently by the Supreme Court of the United States over the estate of a man who died in 2008. The man was a federal employee and had a group life insurance policy through the Federal Employees’ Group Life Insurance Act, known as FEGLIA. In 1996, the man named his wife as his beneficiary.

However, the couple divorced in 1998. After he remarried in 2002, he did not change the beneficiary designation to that of his new wife; it stayed with his former wife. The man died in 2008; his ex-wife, rather than his widow, collected the insurance benefits, which amounted to almost $125,000.

The man’s widow sued to collect the money instead. In the couple’s home state, a statute exists that revokes the beneficiary designation from a divorced spouse in favor of the spouse at the time of an insured person’s death.

The initial court ruling was in favor of the widow; however, an appeals court reversed that decision, saying that the federal insurance program trumped the state law. It remains to be seen how the case will be resolved, but the man could have made his intentions clear had he updated his estate planning materials before his death.

Source: The Washington Post, “Will the widow or the ex-wife get the money? Supreme Court to decide,” Diana Reese, April 22, 2013