## Facts

- William Flesner obtained employer-provided group life-insurance policies governed by ERISA.
- During William’s marriage to Gloria Flesner, William designated Gloria as the sole beneficiary of the policies.
- The policies allowed a beneficiary change only through a written beneficiary-change form submitted and approved by the insurer(s).
- William and Gloria later divorced. In the divorce decree, Gloria agreed to waive her rights to “all benefits existing by reason of William’s employment.”
- William did not submit any beneficiary-change form after the divorce, so the plan documents continued to list Gloria as the beneficiary.
- William died about six months after the divorce.
- After William’s death, Gloria sought to obtain or retain the life-insurance proceeds based on her status as the named beneficiary, while the executor of William’s estate argued Gloria had relinquished any right to those proceeds in the divorce decree.
- The estate contended that enforcing the waiver was a matter of state contract law and that Gloria’s effort to claim the proceeds conflicted with her waiver.

## Issues

1. After ERISA-governed life-insurance benefits are payable to the named beneficiary under the plan documents, does ERISA preempt the decedent’s estate from bringing a state-law claim against the beneficiary to enforce a divorce-decree waiver of those benefits?
2. If the claim is not preempted, is the divorce-decree waiver enforceable against the named beneficiary even though the participant never changed the beneficiary designation using the policy’s required procedures?

## Decision

- The court granted the estate’s motion for summary judgment and denied Gloria’s cross-motion.
- The court held that ERISA did not preempt the estate’s post-distribution (or post-payment) state-law contract claim to enforce Gloria’s waiver.
- The court held that the divorce decree contained an effective waiver of Gloria’s right to benefits arising from William’s employment, including the ERISA life-insurance proceeds.
- As a result, Gloria could not keep (or recover) the proceeds as against the estate, despite being the beneficiary listed in the plan documents.

## Legal Principles

- Under ERISA’s plan-documents rule, a plan administrator must pay benefits in accordance with the beneficiary designation and change procedures stated in the plan, even if a divorce decree contains a waiver that was not processed as a plan-compliant beneficiary change.
- ERISA’s goal of uniform plan administration is satisfied once the plan pays benefits according to the plan documents; a later dispute between private parties over the funds may be governed by state law without interfering with plan administration.
- ERISA does not necessarily preempt a state-law breach-of-contract claim brought after benefits have been distributed, where the claimant seeks recovery from the recipient (not from the plan) based on a separate contractual promise, such as a divorce-decree waiver.
- A clear waiver in a divorce decree can be enforceable under state contract principles against an ex-spouse who was named as the ERISA plan beneficiary, requiring the ex-spouse to relinquish the proceeds to the estate even though the beneficiary designation itself was never formally changed.

## Conclusion

Flesner v. Flesner holds that while ERISA requires administrators to follow plan documents when paying life-insurance benefits, ERISA does not bar an estate from enforcing a divorce-decree waiver against the named beneficiary after payment; because Gloria clearly waived employment-related benefits in the divorce decree, the estate—not Gloria—was entitled to the proceeds as between the parties.


Flesner v. Flesner, 845 F. Supp. 2d 791 (2012)