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Egelhoff v. Egelhoff (2001)
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A quick definition of Egelhoff v. Egelhoff (2001):
Egelhoff v. Egelhoff is a court case that happened in 2001. It was about a woman named Donna Egelhoff who was named as the beneficiary of her former husband's 401(k) plan. Her husband died two months after their divorce, and his children sued Donna, claiming that a state law had revoked her right to inherit. However, the Supreme Court ruled that federal law (ERISA) governed the distribution of the proceeds and pre-empted the state law. This means that Donna was entitled to inherit the money in the plan, even though state law said she couldn't.
In simple terms, the court said that federal law is more important than state law when it comes to 401(k) plans. This is because federal law wants to have the same rules for everyone who has a 401(k) plan, and state law could make things too complicated.
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A more thorough explanation:
Egelhoff v. Egelhoff is a legal case that was decided by the Supreme Court in 2001. The case involved a woman named Donna Egelhoff who was named as the beneficiary of her former husband's 401(k) plan.
Even though state law said that the divorce had automatically revoked her right to inherit, the Supreme Court ruled that Donna was entitled to inherit the money in the plan. This was because 401(k) plans are governed by federal law (ERISA), which pre-empted the state law that interfered with ERISA’s objectives.
For example, David Egelhoff died two months following the divorce with his wife, Donna Egelhoff. While they were married, David designated Donna as the beneficiary of the life insurance policy and pension plan provided by his employer and governed by ERISA. Donna received the proceeds, but David’s children (from a different marriage) sued, claiming that a Washington state statute revoked Donna’s status as beneficiary because they divorced.
The Court ruled that ERISA, under which Donna was entitled to the proceeds, governed the distribution of the proceeds and pre-empted the Washington state statute. The Court focused on the language of ERISA, stating that it “shall supersede any and all State laws . . . relat[ing] to any employee benefit plan.” It also focused on one of the key objectives of ERISA, which is to have uniformity and standard procedures for administering ERISA plans, and that allowing states to interfere with the administration would hinder this objective.
In summary, Egelhoff v. Egelhoff is a legal case that established the supremacy of federal law (ERISA) over state law in matters related to employee benefit plans such as 401(k) plans.