Slayer Statutes and ERISA
Take-Away: The federal Employee Retirement Income Security Act [ERISA] contains an extremely broad exemption provision that over-rides conflicting state laws. One exception to this principle that ERISA preempts conflicting state laws is a state’s slayer statute.
Background: A forfeiture provision under a state’s probate laws is often called a slayer statute. Michigan’s version of a slayer statute is found at MCL 700.2803. Its operative provision includes the following:
“(1) An individual who feloniously and intentionally kills or who is convicted of committing abuse, neglect or exploitation with respect to the decedent forfeits all benefits under this article with respect to the decedent’s estate, including intestate share, an elective share, an omitted spouse’s or child’s share, a homestead allowance, a family allowance, and exempt property. If the decedent died intestate, the decedent’s intestate share passes as if the killer or felon disclaimed his or her intestate share.
(2) The felonious and intentional killing or the conviction of the felon for the abuse, neglect, or exploitation of the decedent does all of the following: (a) Revokes all of the following that are revocable: (i) Disposition or appointment of property by the decedent to the killer or felon in a governing instrument.”
EPIC defines governing instrument to include a deed; will; trust; insurance or annuity policy; POD or TOD beneficiary designation forms; and pension, profit sharing, retirement or similar benefit plan. [MCL 700.1104(m).]
ERISA: Balanced against Michigan’s slayer statute is ERISA’s extremely broad preemption provisions that state that ERISA’s protection of retirement benefits, as well as retirement beneficiary rights, preempt contrary state laws. ERISA provides: [ERISA] “supersedes any and all State laws insofar as they may now or hereafter related to any employee benefit plan described [by ERISA.] [29 U.S.C. 1144.]
An example of how ERISA supersedes state laws is the spousal consent provisions of ERISA which require a plan participant’s spouse to consent, in writing, if a person other than the participant’s spouse is to be named as the beneficiary of the deceased participant’s qualified plan account, such as a 401(k) account.
Does ERISA’s broad preemption provision ‘trump’ Michigan’s slayer statute? Maybe that is not the case.
Hartford Life Insurance Company v. LeCou et al, No. CV 19-17-BLG-SPW, 2021 WL 1312515 (D. Mont., April 8, 2020.)
The federal District Court for the District of Montana, had to deal with whether ERISA preempted Montana’s slayer statute which is much like Michigan’s slayer statute, which provides that an individual who feloniously and intentionally kills the decedent forfeits all benefits under its probate code dealing with intestacy, wills and other donative transfers.
Facts: Bob LeCou was convicted of deliberate homicide for killing his wife and two of her siblings. That conviction was confirmed by the Montana Supreme Court. The personal representative of the deceased wife’s estate filed suit seeking a judgment that the deceased wife’s ERISA plan benefits be awarded to her estate and not to Mr. LeCou.
Issue in Dispute: If Montana’s slayer statute was followed, Bob would not receive any benefits under his deceased wife’s qualified plan as her designed beneficiary. If ERISA preempted Montana’s slayer statute, Bob would receive his late wife’s qualified plan benefits as her designated beneficiary.
Court Decision: The judge found that ERISA does not preempt Montana’s slayer statute, and thus it granted the personal representative’s motion for summary judgment directing the distribution of the balance of the qualified plan account to the decedent’s estate. In support of this conclusion, the judge noted:
- The U.S. Supreme Court in Egelhoff v. Egelhoff, 532 U.S. 141 (2001) explained that the underlying principle of slayer statutes and uniformity across the country. It leaned, albeit in dicta, toward a finding that ERISA does not preempt such state laws.
- Other courts have found that Congress did not intend to supplant slayer statutes with ERISA’s extremely broad preemption provisions: “Congress could not have intended ERISA to allow one spouse to recover benefits after intentionally killing the other spouse.” Laborers’ Pension Fund v. Miscevic, 880 F.3d 927 (7th Cir. 2018;) General Life Insurance Company v. Riner, 351 F. Supp. 2d 492 (W.D. Va. 2005).
Conclusion: This case result is not all that surprising. What is important to keep in mind is that Michigan’s Elder Abuse Task Force is considering amendments to its slayer statute as part of a panoply of laws to curb elder abuse and elder financial abuse. What those amendments look like is anyone’s guess, but they may also ultimately be excepted from ERISA’s preemption.