Weaver v. Keen,
43
S.W.3d 537 (Tex. App.—Waco 2001), affirmed on other grounds,
Keen v.
Weaver,
121 S.W.3d 721 (Tex. 2003).
Husband named Wife as the beneficiary of his annuity plan which was
governed by ERISA. Husband died 13 years after divorcing Wife without
changing the beneficiary designation. Relying on the beneficiary
designation, the annuity company began paying Wife. Husband’s Mother,
the contingent beneficiary, claimed the proceeds. The trial court
rejected Mother’s claim and held that Wife was entitled to the proceeds.
The appellate court first heard this case before the United States
Supreme Court decided Egelhoff v. Egelhoff, 121 S. Ct. 1322 (2001), in
which the Court held that a Washington statute voiding the designation
of an ex-spouse as the beneficiary of a pension plan was preempted by
ERISA. The Texas court, following earlier Texas cases, held that the
Texas redesignation statute (Family Code § 9.302) applied as federal
common law and thus prevents Wife, a former spouse, from receiving the
annuity benefits governed by ERISA absent an alternate designation.
The court then reviewed its decision after the Supreme Court handed down
the Egelhoff decision. The court determined that its prior analysis was
consistent with Egelhoff. First, the court discussed how its original
decision indicated that ERISA preempts Texas law. The court then
examined ERISA which is silent about the effect of divorce and concluded
that it was justified in determining that federal common law included
the automatic voiding of the designation of an ex-spouse as a
beneficiary. The court also believed that the facts showed that Wife had
waived her rights to the proceeds.
Moral: Despite the holding in this case, designations of beneficiaries
on plans governed by ERISA should be promptly changed upon divorce.