BRMM attorney Jonathan M. Colman wins a probate litigation case about whether or not an ex-wife could retain 401-K proceeds she had given up claim to in a divorce decree. The catch is that the deceased husband did not also remove her as a beneficiary from the policy.
The Facts Surrounding the Case
When the ex-wife and dead husband had been married, he had named her as the beneficiary on his profit-sharing plan. Once they divorced in 2007, their divorce decree included a provision terminating her status as a beneficiary to his 401-K and IRA. However, the ex-husband had not removed her as a beneficiary from his 401-K and chosen another beneficiary. When he died, the insurance company disbursed the proceeds according to policy terms. His Estate claimed breach of contract and sought enforcement of the divorce decree, arguing she had no right to retain the proceeds and that the money should go to the Estate. The trial court agreed that the she had no right to retain the proceeds, but denied attorney fees.
The ex-wife appealed arguing that because the dead ex-husband had not changed her as a beneficiary that she was entitled to keep the disbursed proceeds despite the divorce decree. Therefore, she argued that the trial court was wrong in ruling in favor of the Estate.
State of Michigan Court of Appeals Sides with BRMM Attorney, Winning Case for Client
The State of Michigan Court of Appeals said that the trial court was not wrong in its ruling. Under ERISA, federal law states that insurance proceeds must be disbursed according to policy terms. Neither party disputed the federal law and the disbursal to the ex-wife beneficiary. The issue was whether or not she was allowed to retain the funds as opposed to returning it to the Estate. The Estate argued that the divorce decree relinquished Defendant’s interest in the 401-K, so although the insurance company disbursed proceeds to her, she was not entitled to retain it, but was required by the divorce decree to give it back to the Estate. The court agreed.
Next, the Estate argued that the ex-wife’s motion for reconsideration was properly denied because the movant must show a “palpable error” misled the court at the time and that had it not been there, there would have been another result. The ex-wife brought evidence that the dead ex-husband had changed the beneficiary for one policy but not the 401-K, but the court said that the reconsideration had to be considered alongside the evidence the court had in front of it at the time of the decision. The Court of Appeals agreed with the trial court and found the denial of reconsideration proper.
The Estate also successfully argued on appeal that the ex-wife should pay it’s attorney fees. The trial court had denied attorney fees. The Court of Appeals ruled that she did owe attorney fees because the divorce decree stated that if one party had to take the other to court to have the decree carried out, that the person who made going to court necessary should have to pay the fees if they lost the case.
BRMM Probate Litigators: Choose the Best
BRMM’s practice in probate litigation prides itself on being tough on opponents, but compassionate with its clients. BRMM attorneys will fight for you so that you can get through the probate process and make sure your loved one’s wishes are carried out. BRMM handles cases on questions over wills and trusts, administration issues, and disputes involving seniors. In particular, BRMM attorney Jon Colman has developed a unique expertise handling disputes like this one, where a spouse fails to change the beneficiary designation after the divorce, and he has been very successful with them.
Speak with one of our experienced, highly trained probate litigation attorneys today. Contact us at (248) 641-7070 for a free, confidential consultation.