A Virginia man died of a rare leukemia survived by his 3rd wife. One of his assets was a $125K insurance policy he received while employed by the federal government. The policy listed his second wife as the beneficiary. The surviving spouse contested the former wife's right to the policy proceeds.
Virginia has a statute which precludes divorced spouses from inheriting from a deceased former spouse. Nonetheless, the US Supreme Court unanimously ruled that the former spouse was entitled to the proceeds because the 1954 federal law establishing the insurance program and providing that beneficiary designations must be followed trumped the Virginia statute which omits former spouses.
Several points:
1. Ohio has a similar statute to Virginia.
2. After a divorce, individuals MUST revise all of their estate planning documents and update their insurance and retirement plan beneficiary designations.
3. After a leukemia or cancer diagnosis, no matter how positive the treatment options, individuals need to review their estate planning documents and their beneficiary designations.
4. I suspect this was a Pyrrhic victory for the former wife with most of the policy proceeds being consumed by legal fees during the 5 year dispute. But then, most disputes between former spouses are Pyrrhic.
