Boggs v. Boggs
520 U.S. 833, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997)

  • Isaac and Dorothy were married for 30 years and had two children. During that time he worked for a company and earned retirement benefits and put money into an IRA.
  • Dorothy died. In her will she gave Isaac one third of her estate straight up, and a life-estate (aka an usufruct) in the other two thirds. A Louisiana court issued a judgment stating that Dorothy's estate had a community property interest in Isaac's IRA.
    • The way a life-estate works is that Isaac controls how the money is invested and gets the interest, but upon Isaac's death, that principle would then go to their two children.
  • Isaac met Sandra and married her. He kept working for another 6 years and then retired. Then Isaac died.
    • Isaac had left all of his retirement benefits to Sandra, including the part that was supposedly a life-estate.
  • The two children claimed a share of Isaac's retirement benefits they felt belonged to Dorothy who had willed her part to the children.
    • Sandra argued that the Employee Retirement Income Security Act (ERISA)(29 U.S.C. 1001) preempted Louisiana's community property laws because it prohibited pension benefits from being assigned or alienated.
      • Basically, ERISA says that a person like Isaac could not give Dorothy his benefits until he received them, so she never had them to give to her kids in her will.
    • The children argued that under community property, half the money Isaac was putting into his IRA was Dorothy's from the very moment he received the money.
  • The Trial Court found for the children. Sandra appealed.
    • The Trial Court found that under the concept of community property, Isaac didn't give the benefits to Dorothy, they were hers from the very beginning since all property is considered the property of both spouses. There was no transfer involved, so ERISA didn't apply.
      • Louisiana law specifically said that undistributed retirement could be given in a will (aka through testamentary transfer)
    • The Court found that it was no problem for Dorothy to have assigned the benefits to her children.
  • The Appellate Court affirmed. Sandra appealed.
  • The US Supreme Court reversed.
    • The US Supreme Court found that ERISA preempts State community property laws.
      • ERISA didn't explicitly state that you couldn't transfer undistributed retirement benefits through a will. But it was silent on the issue and it did explicitly say that you could do it through divorce. The Court found that implied that it wasn't allowed.
      • Because this was a Federal program, it trumps any State law or common-law equity issues. States are preempted from distributing ERISA benefits according to State law.
  • In this case, Dorothy died. If they had gotten a divorce, then Dorothy could take a portion of the retirement benefits, either as a lump sum distribution, or a Qualified Domestic Relations Order (QDRO). Dorothy could have left those assets to her children in her will.
    • See Ruggles v. Ruggles (860 P.2d 182 (1993))