Supreme Court Awards Fed’s Death Benefits to Ex-Wife, Despite Remarriage

The Supreme Court on Monday affirmed a Virginia state court’s decision to allow the ex-wife of a deceased federal employee to collect life insurance benefits from the federal government.

In its decision, the high court said federal law trumped a state provision that would have given Warren Hillman’s death benefits to his second wife, Jacqueline Hillman. Warren Hillman listed his first wife, Judy Maretta, as the sole beneficiary of his life insurance plan, which he never changed despite his divorce and subsequent remarriage.

The Federal Employees’ Group Life Insurance Act specifically states that policy benefits go to a named beneficiary first and contains a pre-emption provision that declares its power over state law. A district judge in Virginia originally sided with Hillman -- the second wife -- citing a Virginia statute that automatically changes the beneficiary of a life insurance plan if the deceased has gotten divorced, regardless of whether the deceased had changed the listed recipient.

The Virginia Supreme Court reversed this decision, however, finding the FEGLIA took precedence over the state law.

“FEGLIA establishes a clear and predictable procedure for an employee to indicate who the intended beneficiary shall be and evinces Congress’ decision to accord federal employees an unfettered freedom of choice in selecting a beneficiary and to ensure the proceeds actually belong to that beneficiary,” Justice Sonia Sotomayor wrote in the U.S. Supreme Court’s unanimous opinion.

Sotomayor said Congress could have chosen to allow for a similar adjustment as in the Virginia law, but it explicitly opted not to “draw an inference about an employee’s probable intent from a range of sources.”

Maretta, who accepted the death benefits before facing Hillman’s lawsuit, can now keep the Office of Personnel Management’s payment of $124,558.03.