{"id":12153,"date":"2021-01-24T02:00:27","date_gmt":"2021-01-24T08:00:27","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=12153"},"modified":"2025-06-18T17:05:49","modified_gmt":"2025-06-18T22:05:49","slug":"erisa-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/probate\/erisa-what-you-need-to-know\/","title":{"rendered":"ERISA – What You Need To Know"},"content":{"rendered":"

(This is the fourth in a series regarding probate procedures in Texas.)<\/em><\/p>\n

It took four courts and several years but, by gosh, justice was done in the case of Hennig v. Didyk.<\/p>\n

This story is about divorce, death and money. Matt and Wendy married and then divorced. In the divorce decree, Matt was awarded his employment benefits, including his life insurance. After the divorce, Matt logged onto the employer\u2019s benefits system and tried, but failed, to delete Wendy as the beneficiary of his life insurance.<\/p>\n

Years later Matt died. He was survived by his parents, who claimed his estate as heirs. However, Matt\u2019s $377,000 life insurance policy was not part of his estate because \u2013 you guessed it \u2013 ex-wife Wendy was still the named beneficiary<\/a>.<\/p>\n

Both Wendy and Matt\u2019s parents filed a claim with the insurance company for the proceeds.<\/p>\n

Enter court No. 1. Matt\u2019s parents filed a case in the probate court<\/a> so they could be formally recognized as Matt\u2019s heirs. The probate court found they were heirs and then named Matt\u2019s dad as the independent administrator of Matt\u2019s estate<\/a>.<\/p>\n

What Is ERISA?<\/h2>\n

Enter court No. 2. The insurance company, caught in the middle by competing claims, filed a suit in federal court. Why federal court? Because the Employee Retirement Income Security Act (ERISA) is the federal law that controls employer benefits, including employer-provided life insurance. Federal courts have jurisdiction over cases involving a federal law.<\/p>\n

The federal court, properly, ruled that ERISA controlled over state law and that the insurance proceeds should be paid to Wendy because she was named on the beneficiary form. So, Wendy\u00a0<\/em>was awarded the insurance proceeds which was placed in a trust pending additional litigation.<\/p>\n

But wait \u2013 that wasn\u2019t fair, was it? By signing off on the agreed decree, Wendy had agreed to give up her rights to Matt\u2019s insurance benefits. So why should she get the money?<\/p>\n

Estate Ownership and State Laws<\/h2>\n

Matt\u2019s parents were determined to find a legal way to right this legal wrong. They noted that while the federal court had ruled that Wendy was entitled to payment of the proceeds, it had declined to decide who was entitled to ownership of the proceeds after they had been paid to Wendy. Ownership, you see, was a question of state law.<\/p>\n

It was onward to the original divorce court, court No. 3. Matt\u2019s dad, as estate administrator, filed the suit because he had standing to present Matt\u2019s claims in the divorce. Matt\u2019s dad argued that, while Wendy had a right under federal law to receive the money, she did not have a right under state law to keep it. He pointed out that Wendy had contracted away her rights to Matt\u2019s life insurance in the decree.<\/p>\n

The district court agreed and found that Matt\u2019s estate owned the insurance proceeds. Wendy had to turn the money over to the estate.<\/p>\n

Enter court No. 4. Wendy petitioned the state appellate court to overturn the award. She lost again.<\/p>\n

Having Clear Language In A Divorce Decree Helps<\/h2>\n

There were two difference-makers in this case. The agreed divorce decree<\/a> contained clear language regarding the life insurance policy. Had it been poorly drawn, the result may have been different. And Matt\u2019s dad took the right procedural steps \u2013 heirship, then probate administration, then a divorce enforcement case.<\/p>\n

One more step that could be helpful in the next case: a restraining order so that the ex could not squander the money between receipt and judgment.<\/p>\n

Learn more in the remainder of our probate series:<\/p>\n