Divorce Decree Naming Child as Life Insurance Beneficiary is a QDRO

August 4, 2010 (PLANSPONSOR.com) – The U.S. District Court for the Northern District of Ohio ruled that a divorce decree naming a couple’s child as sole beneficiary of the former husband’s life insurance policy is a qualified domestic relations order (QDRO).

As such, it is excepted from the Employee Retirement Income Security Act’s preemption rule, U.S. District Judge Sara Lioi said. Lioi also pointed out that if the divorce decree is a QDRO, in addition to ERISA not being preemptory, the plan may be assigned or alienated, giving the couple’s child sole beneficiary status regarding the  life insurance policy.   

According to the opinion, 29 U.S.C. § 1144(b)(7) excepts QDROS from ERISA preemption with respect to welfare plans as well as pension plans, and prior courts have found that employer-sponsored life insurance benefits are welfare plans.   

When Guy Darko and Melissa Dodge divorced, their separation agreement specifically addressed the forthcoming birth of their child. In addition to custody and child support payments, the document provided that Darko would provide medical insurance for the child and would name the child as 100% beneficiary for his employer-sponsored life insurance policy.  

The court found the agreement, which became the final divorce decree, substantially complied with ERISA’s requirements for a QDRO, including providing the name and address of the alternate payee, stating the percentage of benefits to be paid, and specifying the plan to which it applied.  

When Darko remarried, he named his new wife 100% beneficiary of his life insurance, but after he died, both his surviving spouse and his former wife filed competing claims for benefits. Met Life sent a letter to both parties informing them of the adverse claims and that they would have the option to resolve the issue out of court, but when they did not reach a settlement, MetLife filed a Complaint in Interpleader with the court.  

Lioi noted that the surviving spouse failed to file a timely response to Dodge’s motion for summary judgment, and the court is not required to conduct its own probing investigation of the record to discover an issue of material fact when a summary judgment motion is unopposed.  

The case is Metropolitan Life Insurance Co. v. Darkow, N.D. Ohio, No. 5:09CV02482.