{"id":755,"date":"2018-01-15T05:00:59","date_gmt":"2018-01-15T13:00:59","guid":{"rendered":"https:\/\/www.arwanilawfirm.com\/?p=755"},"modified":"2019-03-13T09:11:30","modified_gmt":"2019-03-13T16:11:30","slug":"federal-appellate-decision-prioritizes-divorce-decree-protection-of-dependents-under-erisa","status":"publish","type":"post","link":"https:\/\/www.arwanilawfirm.com\/federal-appellate-decision-prioritizes-divorce-decree-protection-of-dependents-under-erisa\/","title":{"rendered":"Federal Appellate Decision Prioritizes Divorce Decree & Protection of Dependents under ERISA"},"content":{"rendered":"

A decision made in December by a federal appellate court (United States Court of Appeals for the Sixth Circuit) will have broad implications for divorces<\/a> that also involve qualified domestic relations orders (QDROs) under the Employment Retirement Income Security Act (ERISA).<\/p>\n

In its decision, the court decided that a deceased employee\u2019s life insurance proceeds should go to his minor child instead of his named beneficiary because<\/em> a divorce decree contains all of the information required for a QDRO. In doing so, the decision now provides guidance as to what constitutes a QDRO for all<\/em> ERISA plans.<\/p>\n

The Case<\/strong><\/p>\n

When the couple at the heart of the case\u2014Bruce and Bridget Jackson\u2014divorced in 2006, as part of their divorce agreement, they agreed that any and all benefits from employer-related life insurance policies would benefit their daughter until she turned 18 years old and\/or graduated from high school. Still, at that time, the employer-sponsored life insurance policy listed the beneficiary\u2019s uncle as the sole beneficiary, and no one bothered to adjust it.<\/p>\n

The Employment Retirement Income Security Act & Dependents<\/strong><\/p>\n

Seven years later when Bruce died and the issue went to court, the district court ordered the life insurance company to pay his daughter the life insurance proceeds because the divorce decree sufficed as the QDRO by specifying her as the beneficiary under ERISA.<\/p>\n

The life insurance company appealed, and the appellate court confirmed the district court\u2019s decision, noting that one of the purposes of ERISA was to provide protection for dependents after divorce. Specifically, one of these protections involves an exemption from ERISA\u2019s general preemption provision for QDROs, including domestic orders, as long as they meet the requirements of QDRO. Those requirements include ensuring that the following is listed:<\/p>\n