“Alabama Law Weekly Update” (presented by Lexology) recently studied an ERISA law case from the Alabama Court of Civil Appeals, Kowalski v. Upchurch. Here we find a moment that changed the future law for ERISA benefit claims and divorced patrons.
What It Was
A lawsuit arose from an insurance policy that named a former spouse as the primary beneficiary. The couple had been divorced; and now at the time of death, the annuities, pension plans, and insurance claims were given to the former spouse because divorce did not revoke this designation. Simply: the insurance beneficiary named was the spouse; the two spouses got divorced and one passed away; the beneficiary is still the former spouse because the law stated the divorce alone does not revoke beneficiary rights. That is because the specific jargon in this divorce did not explicitly state the named beneficiary would have his or her benefit rights revoked. However, had it been a case that specifically stated the former spouse should not receive ERISA benefits, the divorce document would hold true.
How It Happened
Once upon a time, a woman was married to a man. The woman named the man as the primary beneficiary on her insurance policy. The man and woman divorced, and the woman died three years later. At the time of her death, both her son and former husband sought benefits from her insurance policy. This led to a civil lawsuit between the son and former husband in which the son won the claim because the court thought all relationship connections should be terminated at the time of the divorce. However, the former husband appealed the verdict and won at the Alabama Court of Civil Appeals because the court determined the marital contract to be different than an annuity contract. The divorce nullified the marital contract only, but since the woman neglected to change the beneficiary on her annuity contract, that contract remains intact.
What It Is Now
Following this verdict after the appeal, the court realized that the divorce should nullify any contracts that were signed during the marriage. Moving forward under Act 2015-312 of Alabama Legislature, all designated beneficiaries to a divorced spouse will be revoked (unless stated otherwise).
Act 2015-312 was possible because the former husband did not stop at an unjust verdict. Although the result of this entire case caused new legislation to be made, it was important to have educated ERISA lawyers on his side in order to correctly analyze the law, contract agreements, and the situation as a whole. This statute became active on September 1, 2015. This case paved the way for many similar cases in the future. Alabama legislature strives to keep up with what is best for the people, and we here at The Martin Law Group keep up with Alabama Legislature. That’s why it’s important to have an ERISA lawyer on your side as you tackle the court system locally in Tuscaloosa and in our state.
Contact your Top Rated National® Law Firm – The Martin Law Group – today to get the benefits you deserve!