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)