Let me tell you a true story that I just got the final word on from one of my (boring) but important legal reading sources. Chances are for many of you reading this, it could turn out to be your story, unless you get your ducks in a row. Here’s the tale of woe, and my comments:
Warren Hillman was a retired employee of the General Services Administration under the Federal Government of the United States. He married Judy Maretta in 1989, but they divorced in 1998.
Hillman had designated Maretta (his first wife) as his federal life insurance policy beneficiary in 1996. (my emphasis, it’s important)
Warren Hillman later married Jacqueline or Jackie in 2002, but he then died of leukemia at the age of 66 in 2008.
In his will, he had “left everything” to his wife Jackie. (note that unlike many of us reading this, Mr. Hillman even made a will, “looking out” for his new love, Jackie)
After Warren Hillman’s death, first wife, Maretta claimed the life insurance policy and was paid $124,588.03. So far as the Office of Personnel management (OPM) was concerned they were doing exactly the right thing. When an employee dies, and the beneficiary of his or her Federal life insurance makes a claim, they pay. It’s the law.
I have no way of knowing if Mr. Hillman just forgot about that beneficiary designation he made back there in 1996, or if he thought that his new will would suffice favoring new wife Jackie. But whatever the reason, Warren left behind a heck of a mess … which I am sure he didn’t intend to do.
Jackie Hillman sued Judy Maretta to recover the benefits under the Commonwealth of Virginia statute that revoked a divorced spouses’ beneficiary in favor of a widow or widower.
So Jackie felt she had the law on her side two different ways. She had a will naming her as her husband’s heir, and she had a state law clearly stating that when the husband died the current wife was to get the life insurance. She probably felt a bit like “how dare that old witch of a first wife come out of the woodwork to get her hands on my money. I just lost my husband, I need that money to live on, dammit”!
The Fairfax County Circuit Court decided the case in Hillman’s favor awarding her the FEGLIA benefits. (Hooray for Jackie and the late Mr. Hillman’s written intentions to provide for his new wife)
However, the decision was overturned by Virginia Supreme Court which ruled that federal insurance programs preempt state laws, citing previous U. S. Supreme Court decisions.
Insert lots of legal mumbo-jumbo here, which all boils down to the fact that the ex is keeping the money, regardless of the dead husband’s wishes. Any idea how this would play out if it were taken to the Philippine court system? Neither do I, my friend, and I can guarantee I don’t want to find out.
Jackie Hillman then appealed to the supreme court which heard the arguments on April 22, 2013 and decided on June 3. Associate Justice Sotomayor in the majority ruling affirmed the Virginia Supreme Court decision which basically said, wills and state laws don’t matter, the beneficiary designated by the federal employee/retiree is the one who gets the money … period.
Now bear something in mind which stuck out to me right away in this case. There was only $100,000 USD in play here. It would be a nice piece of change if anyone dropped it in my lap, but when you start dragging a case though 3 levels of state courts and then try the case before the Supreme Court of the US, you have significant, non-trivial legal bills. We’re talking easily 30% of the recovered amount here. And who paid that bill? Well the loser, of course.
So not only did Mr. Hillman’s current wife Not get the money he intended, she likely had to fork over many thousands more in costs just for the privilege of losing.
Poor Warren. Thought he was doing the right thing for his wife and instead hurt her financially big time. What could he have done?
What he could have done … indeed should have done … long before he started running up legal expenses for matters that Federal law already mandates, was something very simple and practically free. Just fill up simple forms to keep his beneficiary designations current.. Nothing more than the cost of a stamp.
Who is getting your life insurance proceeds and other death benefits? Do you even know? Are you sure? Many of us around this campfire have an ex-spouse (or two) back in our history … have you really severed the ties?
No matter if you are a retired Federal employee, retired military, or retired from any other type of job … if you’re living here in the Philippines, basking in the sun and the glow of the tropical beauties, life is not totally carefree unless you have your affairs in order …before you keep the unavoidable rendezvous.
All federal employees and former should fill out and keep current their beneficiary forms (most of the forms can be downloaded from here). If you’re retired military, check with your servicing personnel office or you local RAO.
Whatever else you do, you don’t want your sojourn here in paradise to leave behind a legacy like Warren Hillman did. Prepare while you can … after you keep your rendezvous, you can’t.
(Disclaimer: I am not a lawyer and none of this is legal advice, it’s my personal opinion as a lay person only)
Interesting! This is what I get from the story. Do not get married. Do not buy insurance. Spend what ever you make before you die. Problem solved. Once lawyers get involved, it all over. Die a poor SOB, then nobody will care. LOL Sad but true.
@ John Heitz
Hi John, well if that’s what you got from it, my condolences. Hope your life and outlook turn for the better someday. Actually the real point is just take care of life’s paperwork before it’s too late … the whole story would have had a happy ending if Mr. Hillman had simply taken care of the one simple form that I am sure he got reminded of a hundred or more times during his Federal career. But no matter, I’m sure he doesn’t care any more either. Godspeed.
When you have nothing, then you have nothing to loose.
My wife told me she wants to be cremated and have her ashes spread in Davao. I told her I wanted to be dumped at sea where the WW2 battle was so I can go rest till Christ’s return. I don’t believe in cremation so if something really did happen to my wife I would hope I’d have enough money to bring her home and buy a permanent lot for her and her dad. He’s buried in a cemetery where you have to pay every year or few years I don’t remember.
@ Ronin Wolf
Well the whole point is, none of what you want can get planned for after you pass …. ow is the time.
One statement kind of struck me .. you said your wife wants cremation but since you don’t believe in cremation yourself, you don’t intend to honor her wishes?
Good luck on the perpetual care issue, there’s essentially nothing like that in most parts of the Philippines. One of the reasons family is so important … otherwise your remains will be “moved out” for another “tenant” aftre a few years.
Hi Ronin Wolf,
I find it hard to believe that you would not want to honor your wifes wishes to be cremated because you don’t believe in it. People die and are incinerated like on 9/11. If you believe in God you must surely believe that He can restore a body no matter what happens. If you get dumped in the sea, sharks and other fish will eat your body in a fairly short time. I find it sad that you don’t want to respect your wife’s wishes.
Hi guys,
You mis understood me. I did not say I will not honor her wishes, of cours I will! That is, if I die first 😉
Sorry but I reread what you wrote and you said she wanted to be cremated and spread over Davao and then you said if she died you would take her and her dad home to bury her back home. From what I read her wish is to be cremated. I personally do not wish to be cremated, but I had an uncle who wanted to be cremated so his wife honored his desire to be cremated. Did your wife say she only wanted to be cremated to save you money? If so that’s OK to bury her, but some people honestly want there body cremated, My uncle had a pretty good amount of money it would not have been a strain on his remaining family to bury him.
Dave what a great story, an awakening for me, not thought about this until now but my superannuation (some $300k AU) is still in my ex wife’s name as beneficiary, in fact my will and testament is dated 1989, we made this when our first child was born. (she is now 24)
I am a slacker as we have been officially divorced for over 6 years.
Many tough decisions to be made now as I don’t want dramas later and I don’t want our money to go to someone wearing a suit/driving a Porsche.
Cheers Steve
@ Steve Hawke
Glad it made you consider your situation, Steve. It would be a real “bitch” in my view for my survivor’s benefits to go to someone else I didn’t intend them too.
It’s very rare, very rare indeed for the US Supreme Court to override a valid will … but some federal laws trump state rules … that’s one of the reasons I decided to write about it … I don’t know how it is with federal agencies and the military in Australia, but in the US they start harping and harping from a person’s youth about keeping survivor information up to date, and most of us develop a very strong “ignore” capability by the time we reach retirement age.
It could be a broadcast very expensive to tune out, though.
That is a very good story… I think often how I would like my soon to be wife have everything when I go, but have not made the move to do the correct paperwork. It would be a travesty if my children cut her out of the picture and received everything.
@ SteveC
Indeed. One of the saddest of messages I get from people asking for help are ones from adult children of expats who have died in the Philippines, without making any provision .. even letting those they left behind know where they are really living, their marital status, what property they own, any children they now have here in the Philippines, etc.
Privacy is a great thing, but you know when you move to a foreign country and never clear things up with those who left behind, and never make your current wishes known, you leave one hell of a sad mess and a lot of unnecessary hurt and anger behind.
I was asked for help not long ago by the adult daughter of an American guy who had long ago divorced this daughter’s mom. The daughter in the US had come to find out her dad had remarried, had bought a house here in the Philippines for his now widow, had children here .. and the adult daughter back in the USA was totally “gob-smacked” by the whole thing. She didn’t know if she, the daughter should fight for rights to the house, she didn’t even know about her half-siblings, she had to find out on her own about her new Filipina ‘step-mom”, and the current wife had gone ahead and buried the expat while his adult children back in the USA wanted to pay to have his body ‘repatriated” to the USA.
Thee USA daughter didn’t know whether to be mad, or sad, or what and the much younger widow here in the Philippines didn’t know how she’s live, take care of her little children ,,, she didn’t even know about US Social security, the kids should have been already registered as US citizens, but weren’t, and the young widow was devastatingly embarrassed because she felt the whole US family hated her and blamed her for burying their dad.
All in all a very sad, stressful, and mostly unnecessary situation, all caused by failure to communicate.
A federal employee’s original designation of primary and secondary beneficiaries on his life insurance policy that he filled out when he was first hired is on file with the Office of Personnel Management, and remains in effect until that federal employee changes it as circumstances in his life changes by filing a new form which would supersede the old. There is no complicated legal mumbo jumbo here. The lawyer for the second wife is not a lawyer for not realizing that Federal laws almost always preempts State laws when the case to be argued is a Federal matter. He should have advised her client that she had no case. Any middle schooler who’s had a semblance of Civics knowledge can easily understand this. The lawyer should have advised her client, Jackie Hillman, that she had no case, and could have saved her money in legal bills in the process. In any case, It’s totally beyond my comprehension why a former federal employee like Mr. Hillman did not have the presence of mind to update the original beneficiary designation on file with the OPM when he executed the will in favor of Jackie Hillman.
“his client”, not “her client”
@ John Reyes
Indeed, John, that’s a basic reason I wrote this article. What is “incomprehensible” is, sadly a fact that happens every day here in the Philippines. I get to see this first-hand as (often young,widowed women with children) come asking me how they can get “help” from the US Embassy, because their US husband just died. And ask anyone who does this sort of work … it’s a very common occurrence for the expat’s personal affairs and his provisions for his wife and children to be in an absolute mess. Sometimes people contact me and ask for advice on what to do with a corpse they are paying storage charges on.
It may be incomprehensible, but it’s way, way all too common.
Australia doesn’t have inheritable pensions but we do have automatic life insurance as part of our superannuation- which like private life insurance and inheritable pensions elsewhere require the beneficiary details to be keps up to date.
@ Gypsy
Good point. You know a lot of guys get into such a pickle (or more accurately leave their survivors in such a pickle), because they hate dealing with the paperwork.
few people hate paperwork more thna me.
But when you think of an ex-wife getting everything you worked for, while your current wife and kids go hungry that should be a good motivating factor to just suck it up one time and “git ‘er done”.
Excellent article Dave.
I know I need to update mine also, and have been trying to decide how to disperse it for awhile now. My wife, was to get everything a long time ago, but she was killed in a car wreck shortly after we got married. Then it was all left to my mom, and sis, which as of 2 years ago, they are both now deceased also. So as I only have distant relatives, all of which I wouldn’t know if I saw them, and the last thing I would ever want is for the state to get everything I have ( very significant amount) so have been compiling a list of charities for almost 2 years now, and I just keep putting it off. So after reading your article, I hope, it has given me the kick in the ass I need to start getting it done, and soon, I just keep procrastinating. Mine is just kinda complicated because I don’t have family, so has to be done different that the average person, and the majority of my assets are in real-estate other than liquid, which adds complications to the process also.
Just hope I can live long enough to make it there to the Philippines in 5 years or less, just cant go now, even though I wish I could. By the time 5 years has passed, and I am there, then my will, can safely be changed to accommodate my future, and futures of others also, I hope.
@ Bill S.
Good for you Bill, you’re certainly thinking with the ‘right head” there. Stick with it.
Hi Dave Starr,
Good article! When I married my wife one of the first things I did is put her name on all my accounts at the credit union and named her as beneficiary on my retirement account. By US standards it would not be a large amount of money, but it was probably more money than a Filipino would make working their entire life. I did not have a previous spouse so my situation was a little different. I haven’t done a will yet. She hates to think of me dying first. I am 48 and she is 38 so I assume I will go first. Do you have any advice on doing a will? I guess I kind of feel since everything is in both our names if I go she will take over the accounts.
@ Jay
I wonder how many others would be interested in an article about wills for foreigners in the Philippines? There’s certainly a lot to learn, and I don’t know much. Not wanting to discuss death is very common here. I have no easy answers.
Dave,
I believe joint Bank Accounts are frozen on the death of a partner until all the legalities are sorted, similar in the PH.
Hi Chasdv,
Would that normally take long. Because actually everything is both our names?
A simple will, does not cost much if the terms are just that, simple. The more family that is involved, the more complicated it becomes though, and dont be surprised if relatives you have never heard from or heard of, for that matter come out of the woodwork, seeking what they believe to be their fare share of an inheritance. A will,,, will make it clear who you,,,, want things to go too.
As a spouse, all that is required by banks is a copy of the death certificate and a copy of the will, then no assets will be frozen, without the will, there is a time period where they might be frozen, but that depends on different circumstances and the state you have legal residence in. Now the Philippines, I have no idea about. So what Dave mentioned in another response, it really would be interesting to find out how, death, will’s , estates, the US, and the Philippines all work, after a spouse dies. I think that if the majority of assets are in the states, and not the Philippines, it will be simpler, only because of the odd way the Philippines Govt. requires things involving foreigners to be done.
Thanks Bill S.
Hi Jay,
I can’t really add more than Bill S has already stated.
Remember though that things move much slower in the PH than the Western world.
I have never been through the process personally.
Dave;
Good food for thought. Since I’d shed Brand X wife back in the 60’s it was easy to add Mayang (My Wife) to DEERS, the Credit Union, and all Insurance now in effect. But for those who have not, I know of many Philippine marriage horror stories where the wife was left with nothing, and Brand X in the states got it all. If all it takes to protect the woman you love is a simple Will, than just do it!
@ Paul Thompson
Amen on that, Paul. Being here a lot longer than I and knowing a log more expats I can well imagine you have plenty of sad tales of woe. It’s hard to tell some sweet young lady with little kids and no income that just because their husband was an American, things won’t come to them automatically … essentially, in many cases, the wives and children are quite literally screwed and the only guy who could have fixed it is dead.
Dave,
After i divorced many moons ago i was quite shocked to be told that if i remain single/never re-marry for the rest of my life and do not make a will, everything after taxes etc goes to my ex wife as nearest next of kin under UK law.