Will the widow or the ex-wife get the money? Supreme Court to decide

April 22, 2013

Which wife gets the money: the widow or the ex?

The U.S. Supreme Court hears oral arguments Monday in the case of Hillman v. Maretta. Although the details read like something from family court, or maybe a Lifetime movie, it boils down to the issue of preemption — whether a particular federal statute preempts state law.

The U.S. Supreme Court hears oral arguments in Hillman v. Maretta. (J. Scott Applewhite/Associated Press) The U.S. Supreme Court hears oral arguments in Hillman v. Maretta. (J. Scott Applewhite/Associated Press)

In 1996, Warren Hillman, a federal employee, named his then-wife, Judy Maretta, as the beneficiary of his group life insurance policy governed under the Federal Employees’ Group Life Insurance Act (FEGLIA). They divorced two years later.

Hillman remarried in 2002, but he neglected to change his life insurance beneficiary from Judy to Jacqueline, his new bride. So when Hillman died in 2008, his ex-wife, Judy Maretta, rather than his widow, received the $124,588.03 in benefits under FEGLIA.

Jacqueline Hillman, believing she, as the widow, was entitled to that money, sued to recover the benefits under the Commonwealth of Virginia’s statute that revokes a divorced spouse as a life insurance beneficiary in favor of the widow or widower.

“The thinking behind the statute is that people would naturally prefer that their life insurance proceeds go to their current families – and not to their ex-wives or ex-husbands – and so the state automatically revokes all life insurance designations to a spouse upon divorce,” wrote Tejinder Singh on scotusblog.com Sunday.

In those cases where the insured really does want the ex-spouse to receive benefits, the person can redesignate the ex as a beneficiary after the divorce. Warren Hillman didn’t do that.

Fairfax County Circuit Court found in favor of Jacqueline Hillman and awarded her the FEGLI life insurance benefits received by Maretta. The ex-wife appealed the decision to the Virginia Supreme Court, which reversed the lower court’s ruling on the basis that other federal insurance programs preempt state law, according to previous U.S. Supreme Court decisions, such as Wissner v. Wissner and Ridgway v. Ridgway.

Hillman’s widow appealed to the U.S. Supreme Court, arguing, among other issues, that states are responsible for “domestic relations.”

This is just one of six cases on the issue of preemption that the high court will hear this term, according to the National Association of Attorneys General, referring to these as “important cases that may not make the headlines.”

I can’t help but wonder about some of the human details, which, of course, are not what the Supreme Court considers. How long was Hillman married to his first wife? Did they raise a family together? Did he leave her anything in his will? Will the widow be destitute without this money?

Although there’s a legal precedent to be determined here, the whole mess could have been avoided, points out the Web site of one legal firm, had Hillman kept his estate planning up-to-date.

Diana Reese is a freelance journalist in Overland Park, Kan. Follow her on Twitter at @dianareese.

 

Diana Reese is a journalist in Overland Park, Kan. Follow her on Twitter at @dianareese.
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