Egelhoff v. Egelhoff Case Brief

Why is the case important?

David A. Egelhoff named the petitioner, his wife, Donna Rae Egelhoff, the beneficiary of his life insurance policy and pension plan that he received while working at Boeing. Both the life insurance policy and the pension plan were governed by the federal Employment Retirement Income Security Act, (ERISA). Later the couple divorced and Egelhoff’s children from a prior marriage claimed that a state law revoked the petitioner’s interest to the insurance policy and pension plan.

Facts of the case

“David A. Egelhoff designated his wife, Donna Rae Egelhoff, as the beneficiary of a life insurance policy and a pension plan provided by his employer and governed by the Employee Retirement Income Security Act of 1974 (ERISA). Two months after the Egelhoffs divorced, Mr. Egelhoff died. His children then sued Donna Rae to recover the insurance proceeds and the pension plan benefits. The children relied on a Washington state statue that provides that the designation of a spouse as the beneficiary of a nonprobate asset – defined to include a life insurance policy or employee benefit plan – is revoked automatically upon divorce. Subsequently, the proceeds would pass to the children as Mr. Egelhoff’s statutory heirs under state law. Under ERISA, the state trial courts granted Donna Rae summary judgment. In reversing, the Washington Court of Appeals found that the statute was not pre-empted by ERISA. In affirming, the Washington Supreme Court held that the statute does not “”refer to”” ERISA plans to an extent that would require pre-emption.”

Question

Whether ERISA preempts a state statute that revokes the payment of a non probate asset to a former spouse?

Answer

Yes. The federal Employee Retirement Income Security act preempts a state statute which revokes the payment of a non probate asset to a former spouse because the statute interferes with the statutes goal to administer a nationally uniform plan. The ERISA statute commands that a plan shall, specify the basis on which payments are made to and from the plan. If administrators are forced to act in accordance with the state statute, they will have to comply with the varying statutes of all 50 states and wait on litigation before processing a payment. This delay conflicts with the legislature’s goal of minimizing the administrative and financial burdens placed on beneficiaries.

Conclusion

The United States Supreme Court determined that ERISA expressly pre-empted the statute to the extent it applied to ERISA plans because the statute directly conflicted with ERISA’s requirements that plans be administered, and benefits be paid, in accordance with plan documents. In addition, the state statute interfered with nationally uniform plan administration, one of the principal goals of ERISA.

  • Case Brief: 2001
  • Petitioner: Egelhoff
  • Respondent: Egelhoff
  • Decided by: Rehnquist Court

Citation: 532 US 141 (2001)
Argued: Nov 8, 2000
Decided: Mar 21, 2001