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Beneficiaries and QDROs

Christopoulos v. Trout, 343 F. Supp. 3d 812 (N.D. Ill. 2018)

(a) Facts: Husband filed a divorce action against wife in Illinois. Immediately thereafter, he changed the beneficiary of his employer-provided group life insurance, naming a series of relatives in varying percentages.

The wife immediately asked the divorce judge to order the husband to name the children as beneficiaries. The trial court properly entered a handwritten order granting the relief requested.

The husband did not comply with the order before his death three months later. The parties had not yet been divorced, and the divorce action abated upon the husband’s death.

Seven months after the husband’s death, the wife filed a motion in the divorce case seeking clarification of the handwritten order. The motion sought formal entry of a DRO. The state court granted the motion and entered a formal DRO nunc pro tunc to the date of the handwritten order. The husband’s estate appealed from the order, but an Illinois appellate court affirmed it, and the Illinois Supreme Court denied review.

The wife sued the insurance company to force payment to the children. The insurance company moved the action to federal court and interpleaded the policy proceeds. The wife moved for summary judgment.

(b) Issue: Who is entitled to the policy proceeds?

(c) Answer to Issue: The children.

(d) Summary of Rationale: All parties agreed that employer-provided life insurance plans, like retirement plans, are subject to ERISA. Thus, the wife and children could prevail only if one or both state court orders was a QDRO.

But the relatives did not argue that either state order failed to meet the definition of a QDRO. They argued, instead, that the state court orders were both void because the divorce case had abated. But this was a question of state law, already resolved by the Illinois state courts. The federal court summarily refused to exercise what amounted to appellate jurisdiction over the state courts on a pure matter of state law.

The relatives also raised the defense of laches. But the real parties in interest on the wife’s side of the case were the children. “The defense of laches does not treat a minor’s failure to act while still under the age of majority as a culpable delay; that is, the defense does not apply to a minor.” 343 F. Supp. 3d at 822. The court therefore rejected the relatives’ attempt to assert laches.


1. While ERISA is mostly frequently applied to retirement plans, ERISA also applies to employer-provided life insurance plans. Any order directing the transfer of employer-provided life insurance must meet the requirements for a QDRO.

2. ERISA imposes federal requirements that must be met before a state court order can make a valid divorce-related transfer of covered benefits. But it does not allow federal courts to second-guess state courts on issues of state law, especially when those issues have been ruled upon by final decisions of the state appellate courts.

3. Christopoulos makes an interesting contrast with Garcia-Tutupu. The state court order in Christopolous had a sounder substantive basis. But the extensive state court litigation in Christopoulos also made it much easier for a federal court to decline to review the result. If there had been a less hasty state court order in Garcia-Tutupu, and a state court appellate decision upholding it, the facts would have been much clearer as to why the state court order was proper under state law. In other words, a state court order that survived the state court appellate process would have been stronger and easier to defend in federal court. Where ERISA benefits are involved and federal jurisdiction is possible, a hasty favorable state court order can be a very mixed blessing.