Thought Your Divorce Was Over? Former Spouse Finds Out Years Later That She Will Not Get Survivor Benefits When Ex-Husband Violates Order and Fails to Designate her as Beneficiary!
On December 6, 2022, the Virginia Court of Appeals released a published opinion in Virginia Retirement System v. Shelton, Record No. 0434-22-2 (12/6/2022).
In that case, the husband and wife divorced in 1997, and the wife was awarded a portion of the husband’s Virginia Retirement System(VRS) retirement. The husband was also ordered to name the wife as the only contingent annuitant for the VRS Survivor Option. An Approved Domestic Relations Order (ADRO) was sent to VRS and approved. When the husband later retired, the wife began receiving payments; when he died, she stopped receiving payments. The wife did not know that when he retired, the husband chose a retirement benefit that did not provide for a survivor benefit. In violation of its own written policy, VRS did not notify the wife when the husband made his election in contravention of the ADRO. The wife ultimately sued VRS to obtain her benefits as a survivor. She won in the circuit court, and VRS appealed to the Court of Appeals. The Court of Appeals ultimately held that, although a spouse or former spouse could be ordered to designate a survivor, VRS cannot be ordered to designate a survivor, even if it violated its own policies. Therefore, the circuit court erred by ruling that VRS owed the wife money, since VRS could not have designated her as a survivor (only the husband could have done that). It should be noted that this is a recent opinion which could be appealed to the Virginia Supreme Court.
This ruling could potentially affect any former spouse who believes that they should receive a survivor benefit from VRS. The former spouse should contact VRS to determine if their ex-spouse has made the court-ordered survivor benefit designation, although in the Shelton case, it took a communication from the wife’s attorney to get a response form VRS. If a former spouse believes that their ex-spouse did not make a proper designation, then the former spouse should contact an attorney at Compton & Duling. The attorney can determine if there is a method of changing the designation, and if there are remedies against the ex-spouse or the ex-spouse’s estate if deceased.
Contact Mike Windsor for more information