Survivor Benefits in Seperation Agreements
Laura W. Morgan
Many separation agreements contain a broad general release
clause that purports to waive all other causes of action between
the parties. These releases are generally interpreted broadly
by the courts, and they bar a wide variety of future claims.
General releases do not, however, waive the right to collect
life insurance or other survivorship benefits as named beneficiary
of the other spouse. That right is a free gift from the other
spouse rather than a legally enforceable claim. Jordan
v. Burgbacher, 180 Ariz. 221, 883 P.2d 458 (1994) (Certificates
of Deposit); Kruse v. Todd, 260 Ga. 63, 389 S.E.2d
488 (1990) (life insurance); In re Velasquez, 295
Ill. App. 3d 350, 692 N.E.2d 841 (1998) (life insurance; holding
over a strong dissent that the right to receive benefits from
a land trust had been waived); Deida v. Murphy, 271
Ill. App. 3d 296, 647 N.E.2d 1109 (1995) (CDs and bank accounts).
See generally Laura W. Morgan and Brett R. Turner,
Attacking and Defending Marital Agreements §
6.061 (ABA 2001).
A release that specifically waives survivorship rights, however,
is enforceable. When determining whether there has been a
waiver of survivorship rights, the question thus becomes whether
the release is general, or specific enough to encompass survivorship
rights. What follows is a survey of the cases addressing this
issue . See Debra E. Wax, Annotation, Property
Settlement Agreement as Affecting Divorced Spouses Right
to Recover as Named Beneficiary under Former Spouses
Life Insurance Policy, 31 A.L.R.4th 59 (1969); 4 Couch
on Insurance 3d § 64:23 (1996), and cases cited
II. RELEASE INSUFFICIENT TO WAIVE SURVIVORSHIP
In the most recent case to decide the issue, Estate of
Tremaine v. Tremaine, 2001 WL 856121(New Hampshire Supreme
Court, July 31, 2001), the parties divorced in 1997. The parties
agreed to a permanent stipulation, which was incorporated
into the divorce decree. Paragraph 10 of the permanent stipulation
10. PENSIONS AND OTHER TAX DEFERRED ASSETS: Each
party is awarded any interest in any pension, retirement,
401k, IRA or other retirement account that each one may have
and as shown on her or his respective Financial Affidavit,
free and clear of any right, title, interest, or claim of
The husband died in 1999. Fleet Bank, where the husband held
an IRA, indicated that after 1991, the husband did not change
the named beneficiary of the IRA.
The court held that the language was not sufficient
to divest the wife of her beneficiary interest.
In this case, each party was awarded any interest
in any ... IRA he or she had at the time of the divorce.
At issue here is a beneficiary interest in an IRA. While it
may be that the stipulation of the parties in the decree was
intended to terminate the respondents beneficiary interest
in the petitioner7#146;s IRA, the language could be interpreted
to mean that she was to retain her interest. Accordingly,
the divorce decree fails to unambiguously change the beneficiary
Many other cases have agreed that language contained in a
separation agreement waiving all interests in
the other spouses IRA is not sufficient to divest the
spouse of a survivor rights.
In Walden v. Walden, 686 So. 2d 345 (Ala. Ct. App.
1996), the agreement and judgement stated that each
party is vested with [his or her] respective IRA. The
court held that the ex-wife was entitled to the benefits from
her ex-husbands IRA at his death because he did not
remove her as beneficiary.
In Estate of Bowden v. Aldridge, 595 A.2d 396 (D.C.
App. 1991), the agreement stated that IRAs would be the sole
and separate property of the spouse who owned the account.
In Luszcz v. Lavoie, 787 So. 2d 245 (Fla. DCA 2001),
the ex-husband was named the beneficiary of the wifes
IRA at the time of her death. The court held that despite
the language of the agreement waiving each spouses interest
in the others IRA, the beneficiary designation was a
separate contract from the divorce agreement.
Thus, the ex-husband was entitled to the survivor benefits.
In Maccabbees Mutual Life Insurance v. Morton,
595 F.2d 1181 (11th Cir. 1991) (construing Georgia
law), the separation agreement provided that each party release,
waive, surrender and assign to the other . . . all claims
. . . which either of them may have against the other.
Nonetheless, the ex-wife was entitled to the survivor benefits
on the husbands IRA where she was named the beneficiary.
In PaineWebber Inc. v. East, 363 Md. 408, 768 A.2d
1029 (2000), the separation agreement provided that each spouse
waives any legal right regarding any interests the other
may have in any pension plan. The court held the ex-wife
was entitled to receive the survivor benefits from her ex-husbands
IRA because she was listed as beneficiary at the time his
In Estate of Bruce v. Bruce, 265 Mont. 431, 877
P.2d 999 (1994), the agreement stated that each spouse releases
and forever discharges the other party . . . from any and
all rights, claims, demands and obligations. The court
held that this language did not waive the ex-wifes right
to claim the IRA when the husband died and she was still named
beneficiary on the account.
In Hopf v. Hopf, 477 N.W.2d 365 (Wis. Ct. App.
1991), the agreement provided that the ex-wife surrender all
right, title and interest in and to the property awarded
to her husband, which included the husbands IRA. The
court held that she was entitled to the survivor benefits
when the husband died and she was still named beneficiary.
Also of note are Graves v. Summit Bank, 541 N.E.2d
974 (Ind. Ct. App. 1989), Schultz v. Schultz, 591
N.W.2d 212 (Iowa 1991), and In re Estate of Rock,
612 N.W.2d 891 (Minn. Ct. App. 200). In each of these cases,
the ex-husband was awarded the IRA in the divorce judgment,
but he never removed the wife as beneficiary. When he died,
the court held she was entitled to the survivor benefits,
despite the divorce judgment. This result would now seem dictated
by Egelhoff v. Egelhoff, 121 S.Ct. 1322 (2001), where
the court held that a state statute that automatically revoked
a beneficiary designation upon divorce is preempted by ERISA.
III. RELEASE SUFFICIENT TO WAIVE SURVIVOR
In Kruse v. Todd, 260 Ga. 63, 389 S.E.2d 1990 (1990),
the agreement provided that an IRA was the sole and
exclusive property of the owner, and the other spouse
shall have no interest therein. The court held
this was sufficient to waive the ex-wifes interest in
her husbands IRA although she was named beneficiary.
In Johnson v. Johnson, 746 P.2d 1061 (Idaho Ct.
App. 1987), the divorce decree awarded the husband all
rights to his IRA. Although his waiver is totally general,
the court held this was sufficient to divest the wife of her
beneficiary interest even though she was named beneficiary.
In Ridley v. Metropolitan Federal Bank FSB, 544
N.W.2d 867 (N.D. 1996), the divorce decree gave the husband
his IRA free of any interest of his ex-wife. This
was sufficient to divest the wife of her beneficiary interest.
In Estate of Bruner v. Bruner, 864 P.2d 1289 (Okla.
Ct. App. 1993), the divorce decree provided that each spouse
owned his or her IRA. This was considered sufficient
to waive the spouses beneficiary interests.
In Estate of Anello v. McQueen, 953 P.2d 1143 (Utah
1998), the divorce decree provided that each spouse was awarded
his or her IRA free and clear of any claim or interest
of the other party. This was sufficient to waive the
ex-wifes right to claim the husbands IRA as named
beneficiary when he died.
It is rather clear that the law is not consistent on whether
what would be considered a somewhat general waiver of a spouses
rights in the other spouses IRA will waive the right
to take as beneficiary. In light of Egelhoff, however,
this entire issue may be moot. The best policy is to advise
the client to change the beneficiary if that is what he or
she desires and not rely on state law that revokes beneficiary
status, on a divorce decree, or a separation agreement.