Michigan Woman Not Entitled to $142,000 in Insurance Proceeds

May 6, 2005 (PLANSPONSOR.com) - A Michigan state appeals court has ruled that a woman who agreed to give up claims on her husband's plan benefits as part of a divorce decree is not now entitled to her ex-husband's life insurance policies and pension plan benefits.

>In throwing out a decision by a lower court, the Michigan Court of Appeals ruled that Hetta Moore was bound by her agreement in her divorce with Clarke Moore to give up her rights to his life insurance proceeds.

>In writing for a three-judge panel, Appeals Judge Henry William Saad rejected the lower court’s decision that Hetta Moore should receive the insurance benefits because she was still listed as beneficiary on her now deceased ex-husband’s policy. Saad said the appeals court also disagreed with the lower court that the waiver of rights in the Moores’ divorce order could not be enforced because the matter was rightly preempted by the Employee Retirement Income Security Act (ERISA).

“Here the question is not whether a plan administrator should be required to determine whether someone other than the named beneficiary is entitled to the proceeds of ERISA plans, but rather, whether ERISA mandates that a named beneficiary who has expressly waived her right to those proceeds in a consent judgment of divorce should be allowed to retain those funds,” Saad wrote. “We hold that where a named beneficiary to an ERISA benefits plan has expressly waived her interest in that plan in a consent judgment of divorce, he or she is not entitled to retain those benefits.”

>According to the court opinion, there was a life insurance policy worth $60,000 and a pension death benefit worth $72,000 when Clarke Moore passed away in February 2003.

>The plans’ administrators paid the plans’ proceeds to Hetta Moore following Clarke Moore’s death, according to the court. Clarke Moore’s estate then filed suit in state court seeking that the proceeds be turned over to it.

>The opinion in Moore v. Moore, Mich. Ct. App., No. 251822, 4/28/05 is  here .