Tuesday, June 4, 2013
Recently, the U.S. Supreme Court emphasised the importance of keeping up with your beneficiary designation form. In 2008, Warren Hillman died. He had a insurance policy valued at $124,558.03 that his ex wife Judy Maretta, and current wife were fighting over.
In Hillman v. Maretta, The Supreme Court held that Judy Maretta was entitled to all of the insurance proceeds.The court stated that the beneficiary designation form was not updated after Hillman was diagnosed with leukemia. Some states have laws protecting spouses from these types of mistakes. Even though Virginia does have this protective statue, the life insurance policy was part of a program for federal employees. The Federal Employee's Group Life Insurance Act of 1954 regulates these policies. The act indicated that the proceeds must be paid according to the beneficiary designation form. If the policy holder does not have one the policy is paid out through intestacy. The Supreme Court ruled that the act preempts the Virgina state law that protects spouses from these mistakes.
See Deborah L. Jacobs, Supreme Court Favors Ex-Wife Over Widow In Battle For Life Insurance Proceeds, Forbes, Jun. 3, 2013.