SEPTEMBER 4, 2000 VOLUME 8, NUMBER 10
Illinois residents James and Nancy Smithberg had been married for 33 years when they got divorced in 1996. Their divorce decree required James to name Nancy as beneficiary of his state retirement account death benefit, and Nancy in turn gave up her claims to other retirement accounts. The rest of the couple’s property was split according to their agreement.
James remarried shortly after the divorce was final. In violation of the divorce decree, he filed a beneficiary change form naming Delores Smithberg, his new wife, to receive the death benefits.
Nancy Smithberg learned of the beneficiary change, and promptly filed a divorce court petition to force James to sign another beneficiary designation form. She argued that there was an emergency, because James Smithberg was seriously ill. James’ lawyer filed a response, and in discussions with Nancy’s lawyer assured her that the correct forms would be signed.
James’ lawyer contacted Nancy’s attorney to discuss the resolution of her lawsuit. The two lawyers discussed who would pay the attorney’s fees and court costs incurred when Nancy filed her action, but did not agree on the next step to be taken.
A few days later, James’ lawyer did in fact get the correct beneficiary form signed. He delivered it to the appropriate clerk at James’ work, but told her not to process the change until he instructed her to do so. She placed the form in her desk drawer; the next morning, James died.
Delores, James’ second wife, noting that she was still named as beneficiary on his retirement, demanded that the death benefit be distributed to her. The retirement board refused, citing the conflict between the two beneficiaries. Ultimately, the retirement board delivered the proceeds to the court for distribution as it determined to be appropriate.
Nancy, the first wife, argued that she should receive the retirement account despite the fact that Delores was named as beneficiary, since James violated the divorce agreement when he changed beneficiaries. Delores argued that she should receive the proceeds because she was named as beneficiary, and that Nancy could then sue James’ estate for his breach of the divorce agreement. The argument ultimately made its way to the Illinois Supreme Court.
One ancient tenet of equity in the our legal system is that the law will “consider done that which ought to be done.” In other words, even though James Smithberg did not properly file the amended beneficiary designation form, because he would eventually have been ordered to do so the Justices decreed that distribution of the account would proceed as if he had. The court ordered the retirement account death benefits distributed to first wife Nancy. Smithberg v. Illinois Municipal Retirement Fund, August 10, 2000.
