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
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
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
The Court found that it was
no problem for Dorothy to have assigned the benefits to her children.
The Appellate Court affirmed.
The US Supreme Court reversed.
The US Supreme Court found
that ERISA preempts State community
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.