Ablamis v. Roper

In Ablamis v. Roper, 937 F.2d 1450 (9thCir 1991), the parties were married in California, a community property state, and remained married until the wife passed away. 937 F.2d at 1452. In Mrs. Ablamis' will, she devised "all property subject to her testamentary power including her one-half community property. . . assets she may have." Thereafter, the executrix of her estate asserted that the property should include all community property, including a one-half interest in her husband's pension rights, which were fully vested. Id. at 1455. However, the Ninth Circuit Court of Appeals disagreed and found that ERISA's spendthrift provisions preempted any state community property law. 937 F.2d at 1456-57. The United States Court of Appeals for the Ninth Circuit considered whether a deceased spouse could devise her one-half interest in her husband's pension benefits, arising under California community property law, to a third party named in her will. The deceased spouse was married to the plan participant at the time of her death. By will, she devised "all property subject to her testamentary power including her one-half ( 1/2 ) community property interest in all community assets and any separate property assets she may have," to a trust for the benefit of her children from a previous marriage. Id. at 1452. The deceased wife's estate brought an action in the United States District Court for the Northern District of California, claiming a property interest in the participant spouse's retirement benefits. That court held that California community property law was preempted by ERISA and that a non-participant spouse could not "bequeath her interest in a participant spouses's retirement plan." Id. On appeal, the executrix of the wife's estate argued that the California Probate Court's order enforcing the wife's will was a QDRO that avoided ERISA's preemption. Concluding that ERISA preempted California's community property law, the Ablamis Court rejected the executrix's contention that the order of the Probate Court was a valid QDRO. The court explained that the provisions of the REA applied to "'domestic relations' orders" and not "'probate' orders," and that "Congress did not intend to classify court orders effecting testamentary transfers as QDROs." Id. at 1455. The court also opined that the probate order could not constitute a QDRO because the deceased spouse's estate could not qualify as an "alternate payee" as defined by 29 U.S.C. 1056(d)(3)(K). According to the Ablamis Court: An estate, even of a deceased spouse, certainly does not fall within even the most liberal construction of the phrase "spouse, former spouse, child or other dependent of the participant." Similarly, Ms. Ablamis's death divests her of the title of "spouse or other dependent. The executrix argues that the term "former spouse" encompasses a deceased nonparticipant spouse. In legal parlance, however, the term "former spouse" does not include a deceased spouse. At law, we use the term "former spouse" to refer to a divorced spouse; once a spouse has died we refer to her, for legal purposes, as a "deceased spouse." Nothing in the language of the legislative history of the REA suggests an intention to afford the term "former spouse" a meaning different from its customary usage. Id. at 1456 (quoting 29 U.S.C. 1056 (d)(3)(K) ). Furthermore, the Court determined that permitting such testamentary transfers to third parties would violate the statutory purpose of ERISA "to safeguard the security of the employee's immediate family members in the case of divorce or separation." Id. at 1456-57. The Court concluded: As a matter of policy, ERISA's limited exception to the prohibition against assignment and alienation has considerable merit. Pensions are designed for the benefit of the living. Congress wanted to ensure that workers would have the security of a fair pension for their lifetimes. Congress also wanted surviving spouses to have what it considered to be a reasonable degree of security. In this connection, Congress wisely deemed it necessary to protect the divorced spouse for the remainder of her lifetime. From a practical standpoint, in order to do so, it was necessary to give her, upon divorce, the share of pension benefits she would have been entitled to if she had remained married and her husband predeceased her. Since that interest is ordinarily converted into cash or other property at the time of the divorce, it followed necessarily that the divorced spouse would receive full right, title and interest in the settlement proceeds, and that she would therefore be free to bequeath any funds remaining at the time of death to the beneficiary of her choice. However, Congress' fundamental purpose was evident throughout-- to ensure that both spouses would receive sufficient funds to afford them security during their lifetimes, not to arrange an opportunity for a predeceasing non-employee spouse to leave a part of her surviving husband's pension rights to others. We must keep in mind that pension benefits are designed to protect individuals in their later years- both the employee and the spouse. That the employee's ultimate pension will be reduced following divorce is unavoidable- because divorce necessitates the maintenance of two households rather than one. However, from the standpoint of pension protection- the fundamental purpose and goal of ERISA- there is no reason to allow a predeceasing non-employee spouse to leave part of her surviving employee spouse's pension to a friend, lover, or relative. Id. at 1457.