Egelhoff v. Egelhoff PDF

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P. 4 2 6 Pe ns i o npl a ns :v a r yg r e a t l y , s og e n e r a l i z a t i o nsa r ed i ffic u l tb u tt y pi c a l l yt he yi n v o l v et h e c r e a t i o no fap r o p e r t yr i gh ti naf u n do fmo n e yt ob eus e db yt h ei n d i v i d u a lu p o n r e t i r e me n t .I ft h eb e ne fit sa r en o tc o mp l e t e l ye xh a us t e db yt h et i met h ep a r t yd i e s ,t h e p a r t yt y p i c a l l yh a sar i gh tt ode s i gn a t eat h i r dpa r t yb e n e fic i a r ywh os h a l lr e c e i v et h e r e ma i n i n gp r o c e e d s( s ub j e c tt of a mi l yp r o t e c t i ond oc t r i ne s Fe de r a lr e g ul at i o ns :p r i v a t ep e n s i o npl a n sa r eh e a v i l yr e g u l a t e db yf e d e r a ls t a t u t e sa n d r e g u l a t i o ns mo s tno t a bl yb yt h ee mp l o y e er e t i r e me n ti n c o mes e c u r i t ya c to f19 7 4 ( ERI SA)Asag e n e r a lr u l e :f e d e r a ll a wp r e e mp t ss t a t el a wont i meo fd e a t hi s s u e s Th ef o l l o wi ngc a s eh a si mp o r t a n tc o n s e q u e n c e sf o re s t a t ep l a n ne r s Wh a tki n dofi n t e r e s t sa r ewed e a l i n gwi t hh e r e ?Pe n s i onp l a n s Wh yi st h es u p r e mec o u r to fu sh e a r i n ga b o u tap e n s i o nc a s e ?b / ci ti n v o l v e saf e d e r a la c t , ERI S A-v e r ys pe c i a l i z e dp a r to fl a w ERI S Ai saf e d e r a ll a wa ndi th a sapr e e mp t i o np r o v i s i o nme a n i n gt h a ti toc c u p i e st h e fie l d ,s ot ot h ee x t e n tt h e r ei sas t a t el a wt h a td e a l swi t ht h i ss i t ua t i o nt hes t a t el a wwi l lb e p r e e mp t e da n dt h a ti st h ei s s u ei nt h i sc a s e Li f ei n s u r a n c ei san a t u r eoft e s t a me n t a r ys u b s t i t ut eb u th e r et h el i f ei n s ur a n c ei sp a r tof t h ep e n s i o np l a na n dt h e r e f o r ei ss u b j e c tt ot h er e q u i r e me n t so fERI S A Th ep e n s i o nb e ne fit sa r ewh a ta r eu s e dt oh e l pt hef a mi l ya f t e rt h ed e a t hs oi tc o u l db et h e ma j o rs o ur c eo ft h ed e c e d e n t ’ swe a l t h Ca ny o ud e s i g n a t ea n y o n ey o uwa nti fy o ua r ema r r i e d?I fe mp l o y e ea n dh u s b a nda r e ma r r i e dc a ns h ed e c i d et od e s i g n a t ead i ffe r e n tp e r s o na sab e n e fic i a r ywi t h o u tawa i v e ro f as u r v i v i n gs p o u s e ?NO. b e c a u s et hef e d e r a lg o v e r n me nth a sa ni n t e r e s ti np r o t e c t i n gt h e s p o us ea f t e rt h ed e a t hwed on ’ twa n tt hes po u s et ob eawe l f a r ec a n d i d a t ef o rt h eg o vt o h a v et od e a lwi t hi ta n de v e ni ft h e r ei sad i v o r c et h e r ei sn opr o v i s i onf o ra u t o ma t i c r e v oc a t i o n,wene e dawa i v e r I nt h i sc a s et h e r ewa sn owa i v e r ,t h e r ewa sn oc h a n g ei nb e n e r fii c a r ya f t e rt h ed i v o r c e , a f t e rt h ed i v o r c eh ec o ul dh a v ec h a n g e dt h eb e n e fic i a r yb u th ed i dno tdot h a t Do e ss t a t u t er e l a t et ot h eERI S Apl a n s ? Eg e l ho ffv . Eg e l h o ff Pa r t i e s : Eg e l h o ff( c h i l dr e no fDa v i dEg e l ho fff r o m ap r e v i o usma r r i a g e ) Eg e l h o ff ( e xs p o us eDon n a ) Co u r t :SC Da t e :2 0 01 Ci t a t i on :53 2US1 4 1 Pr o c e d u r a lHi s t o r y : Fa c t s :

o St a t ut ea ti s s uehe r e :aWa s h i n g t o ns t a t u t epr o v i d e st h a tt h ed e s i g n a t i o no fa s p o u s ea st h eb e n e fic i a r yo fan o n p r o b a t ea s s e ti sr e v o k e da u t o ma t i c a l l yup o n d i v o r c e . o Wea r ea s k e dt od e c i d ewh e t h e rERI SAp r e e mp t st ha ts t a t u t et ot h ee x t e n ti t a pp l i e st oERI S Ap l a n s . o Hol di ng :Weho l dt h a ti td o e s . ( ERI S Ae x p r e s s l yp r e e mp t sa l ls t a t el a wsi n s o f a ra st h e y“ ma yr e l a t et oa ne mpl o y e e b e n e fitp l a n” ) o Do n n aEg e l h offma r r i e dDa v i dEg e l h o ff. Hewa se mp l o y e db yBo e i n gwh i c h p r o v i d e dal i f ei n s u r a n c ep o l i c ya n dp e n s i o np l a n .Bo t hg o v e r n e db yERI S A. Do n n awa st h eb e n e fic i a r yu n d e rb o t h . o Th e yd i v o r c e di nApr i l1 9 9 4 . Da v i ddi e di n t e s t a t ei na na u t oa c c i d e n t . Sh ewa s s t i l lt h el i s t e db e n e fic i a r y . o Th el i f ei n s u r a n c ep r o c e e dso f$ 4 6 , 0 0 0we r ep a i dt ohe r . Sa ma n t h aa n dDa v i dEg e l h o ff, h i sc hi l d r e nb yap r e v i o u sma r r i a g ea r eh i ss t a t u t o r yh e i r s . Th e ys u e df o rt h ep r o c e e d soft h el i f ei n s u r a n c ep ol i c y . I s s u e :wh e t h e rt h ee mp l o y e er e t i r e me n ti n c o mes e c u r i t ya c to f1 9 7 4( ERI S A)p r e e mpt s t h a ts t a t u t et ot h ee x t e n di ta p p l i e st oERI SApl a ns .

Ho l di n g :Fe de r a lERI S Agu i d e l i n e st r u mps t a t es t a t ut er e v o ki n gs p o u s ea sb e n e fic i a r y u p o nd i v or c e . Pl a i n t i ff/ Ap p e l l a n t : De f e nd a n t / Ap p e l l e e : Re a s o n i n g : o Sa ma n t h aa n dDa v i dr e l yo nt h eWa s h i n gt o ns t a t u t er e v o ki n gt h eb e n e fic i a r y s t a t usi nt h ee v e nto fd i v o r c e( a si fs h eha dd i e dt h ed a yo ft h ed i v o r c e ) . o Ap p l i e st oa l ln o n p o r b a t ea s s e t s . o I nt h ea b s e n c eo fan a me db e n e fic i a r y ,t h ep r o c e e d swo u l dg ot ot h eki d s . Th e y a l s os u ef o rt h ep e n s i o np l a nb e n e fit s . o ERI SAh a sa ne x pr e s spr e e mp t i o np r o v i s i o na n dp r e e mp t su nd e rt h ec o nfli c to f l a wp r e e mp t i on .Si n c eERI SAe x p r e s s l yp r e e mp t s , weo n l ya d d r e s st h a ta r g u me n t . ERI S As a y si ts u p e r c e d e sa n ya n da l ls t a t el a ws . . Cl e a r l ye x p a n s i v e . o Weha v ehe l dt ha tas t a t el a wr e l a t e st oa nERI SApl a ni fi tha sac o nne c t i o n wi t ho rr e f e r e nc et os uc hapl a n. o Wel o o ka tb o t ht h eo b j e c t i v e so ft heERI S As t a t u t ea sagu i d ea n dt h en a t u r eo f t h ee ffe c to ft hes t a t el a wo nERI S A. Th eWa s h i n g t o ns t a t u t eh a sa ni mp e r mi s s i b l ec o n n e c t i o nwi t hERI S Ap l a n s .Th es t a t u t e b i nd sERI S Ap l a na d mi n i s t r a t o r st oap a r t i c u l a rc hoi c eo fr u l e sf o rd e t e r mi n i n g b e n e fic i a r ys t a t u s . Ru n sc o un t e rt oERI S A. Al s oi n t e r f e r e swi t hn a t i o n a l l yu n i f o r mp l a n

a d mi n i s t r a t i o n. Sho u l dbed i s t r i bu t e dp e rpl a na n dn o t p e rs t a t u t es ot h a ta d mi n i s t r a t o r s d o n ’ th a v et ok n o wt h el a wi ne a c hs t a t e . o Thei de ao fERI SA:wa st omi n i mi z et h ea d mi ni s t r a t i v ea n dfin a nc i a lbu r d e n so n p l a na d mi n i s t r a t o r s , b u r d e nsu l t i ma t e l yb o r n eb yt h eb e n e fic i a r i e s . Th eERI S Ap r e e mpt i o nwa ss p e c i fic a l l yt oa v o i dt h i s . Th eki d ss a yt h a tt h es t a t u t ei n v o l v e sb o t hf a mi l yl a wa n dp r o b a t el a w, a r e a so ft r a d i t i o n a l s t a t er e g ul a t i o n . Ho we v e rc o n gr e s so v e r c a met h epr e s u mpt i o no ft r a d i t i on a ls t a t ea r e a wh e ni tma d ec l e a ri t sd e s i r ef o rp r e e mp t i on .Th e ya l s oa r g u et h a tt h es l a y e rs t a t u t e sma y a l s ob er e v o k e db yERI S A.Wed o n ’ tn e c e s s a r i l ya g r e ewi t ht h a ta n dt h a t ’ sn o tt h ei s s u e b e f o r et hec ou r t . Th es l a y e rs t a t ut e sa r ep r e t t yu ni f o r ma c r o s st h ec o u n t r ya n ds omi g h tb e c o n s i d e r e dd i ffe r e n t l y . o Thec o ur tr ul e dt ha tt heWa s hi ng t o ns t a t ut eha sa ni mpe r mi s s i bl ec o nne c t i o n wi t ha nERI SApl ana ndwa spr e e mpt e dbe c a us ei t : o ( 1 )wou l dc o nt r o lwh oi st or e Di s s e n t :Br e y e r–wh yi st h i sd i ffe r e n tf r o mt h en u me r o u so t h e rs t a t u t e st h a ti mp o s es o me o t he rki n do fb u r d e no nERI SA?I ta c t u a l l yf u r t h e r ’ sERI SAso b j e c t i v e–d e v e l o p i n gaf a i r s y s t e m. Hewo u l d n ’ th a v ewa nt e dh i se xwi f et oh a v et h eb e n e fit s . Hewo u l dh a v ewa n t e d h i sc hi l d r e nt oh a v et he m. Sh ea l r e a d yg o th e rf a i rs ha r ei nt h ed i v o r c e . I twa so nl ys i x mo n t h ss i n c et h edi v or c e . Sh e ’ sg e t t i n gawi n d f a l la tt h ee x pe n s eo fh i sc hi l d r e n . e xs p o us ei sg e t t i n gs o me t h i n gt h a ts h ewa sn o ti n t e n de dt or e c e i v e& i nmo s tc a s e st h e d e c e d e n tp r o b a b l ywo u l d n ’ twa n tt oc o n f e rt h i sma j orb e n e fit( p e n s i o nbe n e fit )s o me o n e h edi v o r c en o tl o n ga g o o wh a ta b o u tt h e“ s l a y e rs t a t u t e s ”i ft h er e v oc a t i ono fd i v o r c es t a t u t e sa r ep r e e mp t e d wh ya r e n ’ tt h es l a y e rs t a t u t ep r e e mp t e d?s l i p p e r ys l o pea r g u me n t o s l a y e rs t a t u t e swe r et h e r ea l r e a d ya n dt h et y p eo fs t a t u t e( Wa s h i n gt o ns t a t ut e )i s f a i r l yr e c e n ta n dwed o n ’ th a v et od e a lwi t ht hei s s u e

o wa st h ema j or i t yr i g ht ? Li f ei n s u r a n c ei sp a r to fape n s i o np l a n , t ot hee xt e n ti ti sp a r tofap e ns i o np l a n , y o u r c l i e n tu p o nd i v o r c en e e d st ot a k et h i si nt oa c c ou n ta n dCHANGEt h eb e n e fic i a r y Th et r e n di nt h el a wa tt h ep r o b a t ee ndi s :i t sc o n s i s t e n twi t haNY/ Wa s h i n g t ont y p eo f a p p r o a c h , a l lmo v i ngt o wa r d sb r o a dr e v o c a t i o nu p ond i v o r c ep r o v i s i o n s , a st h eu s eo fwi l l s u b s t i t u t e se xp a nda n di n c r e a s ei nt h ed i v o r c er a t e s p . 4 24 4 2 6d i ffe r e n tki n dso fp e n s i o np l a n s de fine dbe ne fitpl a n—t h ee mp l o y e rpr o mi s e st op a ya na n nu i t yo nr e t i r e me nt e x a mpl e :s e tp e r c e n t a g eoft hea v e r a g eofe mp l o y e e . . p a y sdu r i n gl i f e , i ti sawa yo fp r o v i d i n gi n c o mea f t e rr e t i r e me n t de fine dc ont r i but i o n-e mp l o y e ro re mp l o y e eo rb o t hma keac o n t r i bu t i o nt oas p e c i fic p e n s i o na c c ou n t

* t o d a yt hi si smo r ec o mmo n h a sp os t de a t hb e ne fit s s ot ot ha te xt e ntwea r ed e a l i n gwi t hawi l ls u b s t i t u t e i nt e r mso fe s t a t el a wswh a ta r et h es i g n i fic a n td i ffe r e n c eb e t we e nt het wop l a n s ? Ta xa d v a n t a g e sf o rq u a l i fie dpl a nsu n d e rERI SA t a xde f e r r e d , me a n i n gy o ud o n ’ tp a yi n c o met a xu n t i ly o ua c t u a ls t a r tr e c e i v i n gi t , p r e t a x e dd o l l a r s( a f t e rr e t i r e me n tua r ei nal o we ri n c o met a xb r a c k e t ) Mu l t i p a r t ya c c o u n t s...