Fifth Circuit affirms deceased man's ex-wife entitled to $500K from 401(k) after widow sues

By Charmaine Little | May 23, 2019

NEW ORLEANS – The U.S. District Court of Appeals for the Fifth Circuit ironed out a case between a deceased man’s widow and ex-wife, siding with the ex-wife and ruling that she’s owed $500,000 from the decedent’s 401(k) balance.

Pam Miletello, who is the widow of Gerald Miletello, sued his ex-wife, Sandra Bellgard Miletello, and RMR Mechcanical Inc. in the U.S. District Court for the Western District of Louisiana. Bellgard Miletello and Gerald Miletello were married until Jan. 21, 2014. He married the plaintiff the following May. Bellgard Miletello was awarded $500,000 from the 401(k) in a divorce settlement. 

Gerald Miletello passed away unexpectedly in a plane crash just months after the settlement was executed. The plaintiff then sued in hopes of receiving the 401(k) funds as she was Gerald Miletello’s surviving spouse.

The issue at hand surrounded the qualified domestic relations order (QDRO), under federal law. The lower court granted summary judgment for Bellgard Miletello, saying that she obtained a QDRO in a timely manner. While Pam Miletello appealed, the court agreed with Bellgard Mileteoo and affirmed in an April 16 order.

Even though the plaintiff said the QDRO isn’t valid because it was after Gerald Miletello’s passing, Judge Catharina Haynes disagreed. 

“Congress has modified the Employee Retirement Income Security Act of 1974 (ERISA) to make ‘clear that a QDRO will not fail solely because of the time at with it [was] issued,” Haynes wrote.

While the ERISA bars state laws connected to employee benefit plans, the QDRO doesn’t apply in this particular case as it’s a domestic relations order (DRO), which “is any judgment, decree, or order that concerns the ‘provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant’ and is ‘made pursuant to a State domestic relations law (including a community property law),’” Haynes wrote.

At the same time, a QDRO “is a type of domestic relations order that creates or recognizes an alternate payee’s right to, or assigns to an alternate payee the right to, a portion of the benefits payable with respect to a participant under a plan,” said Haynes, which is relevant in this case. 

When this method is considered, the alternate payee is seen as a beneficiary of the plan in question, which would be Gerald Miletello’s retirement package.

Judges Rhesa Hawkins Barksdale and Leslie H. Southwick concurred with Haynes' opinion.

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