HD28 - The Award of Survivor Benefits and Life Insurance to Divorced Spouses

  • Published: 1992
  • Author: Virginia State Bar and Family Law Section
  • Enabling Authority: House Joint Resolution 430 (Regular Session, 1991)

Executive Summary:
The present status of Virginia's equitable distribution statute permits the court to divide pensions, deferred compensation and other retirement plans upon divorce, by the "if, as and when" method. See § 20-107.3(G) and House Document No. 21 (1991). Generally, federal enabling legislation relating to military retirement divisions, civil service pension divisions, qualified private pension plans under ERISA and other federal retirement plans requires plan administrators or government agencies to honor state court orders which also divide survivor benefits or annuity options pursuant to such plans, or which require the designation of a former spouse as beneficiary of all or part of such survivor benefits. See, eg., 5 U.S.C.S. § 8341 (h)(l) [former spouse of deceased civil service employee entitled to survivor annuity "if and to the extent expressly provided for ... in the terms of any Decree of Divorce or annulment or any court order or court approved property settlement agreement incident to such Decree]; 10 U.S.C.S. § 1448(b)(5), 1450(f)(3)(A), (f)(4)(A) [former spouse of military retiree is entitled to survivor benefit or annuity when made pursuant to the requirements of a "court order"]; IRS Code § 414(p)(5) [qualified private pension plans shall treat a former spouse as surviving spouse for determining survivor benefits to the extent provided in any qualified domestic relations order]; 22 U.S.C.S. § 4060(b) [former spouse's rights in annuity of foreign service employee shall be determined in accordance with court order, to the extent provided in that court order]. In the context of military retirements, legislation was passed by Public Law 99-661, effective November 14, 1986, which permits state Judges to order that a divorced spouse already named as a beneficiary of a survivor benefit plan ("SBP") be named as former spouse beneficiary at the same level of participation of such benefits.

However, due to the lack of any statutory authority in Virginia's equitable distribution statutes to permit a state court Judge to enter such orders relating to survivor benefits or annuities, and the generally strict construction of Virginia's equitable distribution statutory scheme [See House Document No. 21 (1991) summarizing the history of such strict construction in a more comprehensive and general study made of Virginia's equitable distribution statute], Virginia's courts have generally held that they have no authority to enter any orders relating to survivor benefits or annuity plans in divorce actions.

Further, in the context of the issue of life insurance awards, the Virginia Supreme Court has held that trial courts have no authority to award post-death benefits. Lapidus v, Lapidus, 226 Va. 575.

Due to the lack of Virginia's courts specific statutory authority over such issues, the adverse financial impact that can occur to a former spouse upon the death of the other former spouse where no annuity or SBP benefits are awarded, the high military and civil service population in Virginia, and the general federal legislation which would recognize state court orders in such matters, House Joint Resolution No. 430 (See Appendix A) requested the Family Law Section of the Virginia State Bar to review the issue and to report its findings back to the General Assembly.

Lawrence D. Diehl, a member of the Board of Governors of the Family Law Section of the Virginia State Bar and its Legislative Chairman, was selected Chairman of the Study Committee. The additional members included current members of the Board of Governors of the Family Law Section (Richard E. Crouch, Ronald S. Evans and Frank W. Morrison), as well as representatives of the Virginia Trial Lawyers Association (Betty A. Thompson) and the Virginia Women Attorneys Association (Martha JP McQuade). Delegate Gladys B. Keating, patron of the study resolution, Shirley Taft, National President of Ex-Pose [Ex-partners of Servicemen (Women) for Equality], a national organization promoting the rights of former spouses of military servicemen, and Lucille J. Annuta, an attorney specializing in private ERISA benefits and employed by Reynolds Metals Company, also served on the Committee. Also serving in an advisory, non-voting capacity was Commander Patrick J. Kusiak: (a member of the Armed Forces Tax Council; Assistant Director, Compensation Directorate, Office of Assistant Secretary of Defense, Force Management and Personnel), who has assisted in the drafting and has testified in Congress on many legislative matters relating to the Uniformed Services Former Spouses Protection Act.

Meetings of the Committee were held on August 29, 1991, and November 7, 1991. Various cases, memoranda and articles on the status of Virginia and non-Virginia law on the issues were exchanged and reviewed by the Committee members. Drafts of proposed legislation and the policy arguments on the issues were exchanged between the Committee members.

Due to the fact that many of the issues were not merely legal issues, but were policy issues that required maximum input from those practicing in the field of family law in Virginia, a survey was prepared and sent to all members of the Family Law Section of the Virginia State Bar, and the members of the Virginia Women Attorneys Association (See survey, Appendix B). The general policy reasons favoring and opposing the enactment of state legislation relating to the issues of survivor annuities and life insurance were contained in the survey in order that the responses could reflect these competing policy considerations. The results of the surveys contained extensive comments on the issues, all of which were carefully considered by the Committee. The results of the survey are shown in Appendix C.