The Michigan Supreme Court issued its decision in Sweebe v Sweebe (April 26, 2006, Docket No(s) 126913), holding that life insurance benefits can be waived by signing a judgment of divorce.
Justice Cavanagh wrote:
The issue in this case is whether the preemption provision of the Employee Retirement Income Security Act (ERISA), 29 USC 1001et seq., precludes a named beneficiary from waiving the proceeds from a life insurance policy. We hold that it does not. While a plan administrator is required by ERISA to distribute plan proceeds to the named beneficiary, the named beneficiary can then be found to have waived the right to retain those proceeds. In this case, the Court of Appeals correctly held that plaintiff waived her right to retain the proceeds. Accordingly, we affirm the Court of Appeals order that directs plaintiff to pay an amount equal to the insurance proceeds to the decedent’s estate.
In this case, plaintiff signed a provision in her judgment of divorce in which she extinguished any interest she had or may have had in any insurance contract or policy of the decedent. 3 The provision she signed stated “that any interest which either of the parties may now have or may have had in any insurance contract or policy, and any other interest in any insurance contract or policy of the other party, shall be extinguished . . . .” (Emphasis added.) It also stated that “the parties shall in the future hold all such insurance free and clear from any right or interest which the other party now has or may have had therein, by virtue of being the beneficiary, contingent beneficiary or otherwise.” (Emphasis added.) Our review of this provision indicates that plaintiff clearly and unequivocally waived her right to the plan proceeds. Plaintiff and the decedent freely reached an agreement about how to divide property and insurance proceeds. Therefore, plaintiff consented to the waiver of her right to receive proceeds from the decedent’s insurance plan. Under Michigan law, plaintiff validly waived the right to retain the proceeds under the binding judgment of divorce.
Accordingly, we affirm the Court of Appeals order. We conclude that the benefits were properly paid to plaintiff under ERISA, but plaintiff has no legal right to retain the proceeds under the waiver provision in the judgment of divorce. Plaintiff must pay an amount equal to the insurance proceeds to the decedent’s estate, which will then distribute the proceeds according to the decedent’s will or the laws of intestacy. However, we also note that today’s holding does not preclude anyone, including plaintiff, from asserting that there is a will or other valid expression of testamentary intent that the court should recognize, or from asserting a valid claim against the estate in the usual fashion our probate statutes and rules allow.