Cooley & Handy recently secured a victory for one of its client in Federal District Court in the Eastern District of Pennsylvania in a case involving the disposition of insurance proceeds under the Employee Retirement Income and Security Act (“ERISA”) and “Slayer’s Act” principles. The case arose out of a highly contentious divorce that ended with a wife murdering her husband. Cooley & Handy’s client, a young man, is the son of that couple. Cooley & Handy was not involved in the divorce proceedings.
The son sought payment on insurance policies on the life of his father, under which his mother was named as the primary beneficiary and he was named the secondary beneficiary. The mother was prohibited from receiving the insurance proceeds directly under “Slayer’s Act” principles, which hold that no one should benefit from a murder that they committed. The son originally intended to use a portion of the insurance proceeds to pay for a private criminal defense attorney for his mother. The Estate for the deceased father, controlled by his brother (the son’s uncle), interceded in the matter and sought to control the disposition of the insurance proceeds. The uncle continued to seek control of the insurance proceeds even after the son agreed to not use them for his mother’s defense or to otherwise benefit his mother.
On January 28, 2013, the Federal District Court granted the son’s Motion for Summary Judgment, filed by Cooley & Handy on behalf of the son, and ordered the insurance proceeds released to the son. The court agreed with Cooley & Handy’s analysis and found that ERISA governed the disposition of the proceeds. Under ERISA, the insurance proceeds must be distributed strictly in accordance with the ERISA plan documents. As a result, the decedent’s beneficiary designations governed the distribution of the proceeds and, because the mother was precluded from receiving the proceeds under Slayer’s Act principles, the son was entitled to receive the proceeds.