Serving Clients Throughout Wisconsin & Illinois 

Supreme Court Case Highlights Need for Proper Estate Plan Maintenance

Everyone is aware of the need for conducting periodic maintenance on their cars and their homes, or undergoing periodic checkups for their health. But what about your estate plan? Simply adopting a “create it and forget it” approach to estate planning, with no checkups, can sometimes be harmful to your estate plan’s well-being, as one case going before the U.S. Supreme Court, Hillman v. Maretta, highlights.

In 1996, Warren Hillman named his wife, Judy, as the primary beneficiary on his Federal Employees’ Group Life Insurance (FEGLI) policy. Two years later, the couple divorced. Warren remarried in 2002. Warren and his subsequent wife, Jacqueline, remained married until Warren died in 2008. However, Warren’s insurance policy beneficiary designation remained unchanged from when he created it in 1996, leaving ex-wife Judy as the named beneficiary.

Both women filed claims for the $124,000 policy benefit. Hillman’s ex-wife ultimately received the payout, because the policy named her as the intended death beneficiary. Jacqueline sued, contending that, under Virginia law, Warren and Judy’s divorce triggered an automatically revocation of the beneficiary designation in favor of Judy. The Virginia Supreme Court, however, ruled for the ex-wife, deciding that federal statutes governing FEGLI trumped Virginia law, and required giving first priority to “the beneficiary or beneficiaries designated by the employee,” which, in this case, remained the ex-wife. Under the federal law, Judy’s relationship to Warren was irrelevant.

The wife appealed the ruling and the U.S. Supreme Court has agreed to take the case. What makes the facts of this case such a cautionary tale is that the dispute, and subsequent protracted litigation, was entirely avoidable. There are many common mistakes people make with estate planning, with the chief one being never creating a plan at all. However, even those who create a plan fall into traps too often, with the Hillman case hinting at two of those.


First, it is vital to realize that your estate plan encompasses more than just your will and/or revocable trust. In addition, it also includes your life insurance policies, as well as other assets that have designations transferring them at the occasion of your death (such as a bank account with a pay-on-death designation or real estate with a transfer-on-death deed, among others.) Second, it is essential to remember that you must maintain your estate plan to make it work properly, just like your body. Certain occurrences necessitate a trip to the doctor. Similarly, certain life events, like divorce, remarriage, death of a spouse, or birth or adoption of a new child, just to name a few, require checking with your estate planning attorney to see if your plan is still functioning properly, or if changes are in order.

A popular series of commercials by a major insurance provider encourages customers to undergo a “double-check” to search for additional cost savings on their policy premiums. Similarly, submitting your estate plan to a periodic “double-check” is also extremely important, as it may prevent an outcome from occurring after your death that you never intended or desired. Our Premium Trust Package clients have checkups every 3 years to be sure they have things covered.

To advise you regarding your estate plan checkup, you should seek the assistance of a knowledgeable estate planning attorney. The attorneys at Estate Law Partners, LLC, can help you ensure that you have an estate plan that continues to meet your needs.

Contact us through our website to schedule your confidential, no obligation initial consultation.

Categories

 


Quality Counsel

Experience You Can Count On

What Sets Us Apart?

Our Philosophy
  • Cutting Edge
  • Authentic
  • Respect
  • Empathy

The Stories That Matter

Read Our 5 Star Reviews
    She was very responsive and always made sure to answer any questions we had.

    “Our experience with Danielle was very professional and efficient even with having to do everything through zoom due to Covid. She was very responsive and always made sure to answer any questions we ha ...”

    - Shannon
    [Matt] was very engaging and rephrased any questions we didn't udnerstand.

    “Matt was able to answer my questions without all the legal mumbo jumbo. He was very engaging and rephrased any questions we didn't udnerstand. Due to COVID pandemic, we were limited to a phone ...”

    - Steven
    [Matt] was very helpful...

    “He was very helpful in answering our questions and providing guidance that we understood.”

    - Troy
    He took the time to understand our goals and our family situation. He was friendly, thorough, and very knowledgeable.

    “What a great attorney! He explained everything to us in plain English, with no legal jargon. He took the time to understand our goals and our family situation. He was friendly, thorough, and very ...”

    - Mark
    He was wonderful...they asked all the right questions, were patient with our back and forth, and everything was wrapped up successfully.

    “My husband and I needed a will and turned to this firm for their help after the firm had invited us to a "what is estate planning all" about dinner/meeting. Having a will was something we knew we ...”

    - Kris
/

Take the Next Step

Schedule Your Consultation Today
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please enter your address.
  • Please enter your city.
  • Please make a selection.
  • Please enter your zip code.
    This isn't a valid zip cide.
  • Please make a selection.
  • Please make a selection.
  • Please enter a message.