Life Insurance Waiver Determines Beneficiary Battle

December 27, 2004 ( - A Texas woman has lost her bid to overturn a federal court's decision that her dead ex-husband's estate was entitled to life insurance proceeds after she had relinquished her claim on the money in the divorce.

>The US 5 th Circuit Court of Appeals upheld a lower court ruling that Eddie Lee Galaway, administrator of Bradford Wayne Galaway’s estate, was due the money from the Guardian Life Insurance Company of America policy offered through Bradford Galaway’s employer.

 Circuit Judge Carolyn Dineen King, writing for the court, said the case should be governed by the agreement reached in the June 2002 divorce between Bradford Galaway and Kimberlye Finch in which Finch gave up any rights to the proceeds of her ex-husband’s life insurance coverage.

>Bradford Galaway died in a plan crash in November 2002, without having changed his named beneficiary from Finch, according to King’s ruling. After the death, both Eddie Lee Galaway and Finch claimed the proceeds forcing Guardian to go into federal court to ask for a judicial determination of the rightful beneficiary. A US magistrate ruled in favor of Galaway and Finch appealed.

>In the appeals court case, Finch argued that the court should solely apply the dictates of the Employee Income Retirement Income Security Act (ERISA) and the plan documents’ instructions about making payments to a named beneficiary. However the appeals judges ruled that it was more appropriate to apply federal common law to determine if in fact, Finch had legally lost claim to the money in this case.

The ruling is at .