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Benefits Payable to "Surviving Spouse" Separated from Insured for 20 Years

Benefits Payable to "Surviving Spouse" Separated from Insured for 20 Years

ERISA and Life Insurance News
(October 17, 2011)

Minnesota Life Ins. Co. v. Bush,
No. 1:10-CV-2620-RWS (N.D. Ga. May 18, 2011)

Bush was provided life insurance and accidental death insurance of $400,000 under ERISA-governed group insurance policies issued to his employer by Minnesota Life. He did not designate a beneficiary.

The policies provided that if there is no eligible beneficiary, or if the insured does not name one, we will pay the death benefit to:

(1) the insured’s lawful spouse (this does not include a domestic partner), if living; otherwise,

(2) the insured’s natural or legally adopted child (children) in equal shares, if living ....

Bush was killed in a motor vehicle accident. Minnesota Life received claims from Cynthia Bush, who was married to Bush in Illinois in 1985 and who had been separated from him for more than 20 years, and from several persons claiming to be children of Bush. Minnesota Life identified additional children or purported children, then filed an interpleader action, naming as defendants Cynthia Bush and the various children.

Cynthia Bush contended that she was the surviving spouse, because she and Bush were only separated and never divorced. Various of the children contended that the marriage had been dissolved, that Cynthia Bush had not held herself out as Bush’s wife, that she was involved in a relationship with another man, that Bush had children with other women, and that Bush had been living in Georgia with another woman for 17 years at the time of his death.

The claimants disputed whether Georgia law or Illinois law should control the children’s claim that the marriage had been abandoned and therefore dissolved. The court concluded that the result probably would be the same in either case, but because Bush was domiciled in Georgia at the time of his death, the court applied Georgia law to determine whether the marriage remained valid.

"Even recognizing that James Rodney Bush and Cynthia Bush lived apart for 20 years since their marriage and that they did not hold themselves out as spouses, no act taken by either party has the effect of dissolving the marriage," the court said. "Neither ever re-married, for example, such that the court would be required to determine which marriage was lawful."

While acknowledging the argument of the children, the court observed that if Bush had designated a beneficiary, or if he had divorced Cynthia, "he could have effectuated his purported desire to have his children receive the insurance policies proceeds. But he did neither." Therefore, the court held that at the time of Bush’s death, Cynthia "remained his ‘lawful spouse’ and is entitled to the proceeds of the insurance policies."

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