State community property laws offer certain protections to spouses in case of marriage dissolutions and often require a division of marital assets between the divorcing spouses and in the event of a spouse’s death.

In case of a spouse’s death, community property state laws may be involved in a life insurance dispute. Such laws are complex, especially if they are viewed in conjunction with federal laws controlling such life insurance claims as FEGLI claims.

The federal laws controlling FEGLI claims usually preempt state laws, including those of community property states. Courts across the country have ruled on the issue of a FEGLI claim dispute in community property states.

Thus, the United States District Court of California ruled in MetLife v. Armstrong-Lofton[1] that a state law claim to the benefits of a FEGLI policy is preempted by federal laws.

In MetLife v. Armstrong-Lofton, a dispute arose when there were multiple claims for life insurance benefits under a Federal Employees’ Group Life Insurance (FEGLI) policy issued by MetLife pursuant to the terms of the Federal Employees’ Group Life Insurance Act (FEGLIA).

The insured, Mr. Lofton named as beneficiaries on his policy Sheila Armstrong-Lofton and his son Mark. After Mr. Lofton’s death, his ex-wife, daughter and widow all filed a claim for the FEGLI benefits. MetLife filed a lawsuit seeking declaratory judgment on the proper beneficiary of the FEGLI benefits.

The widow and the insured resided in California, which is a community property state. The widow claimed that the premiums for the FEGLI policy were paid from their community funds and under the state community property laws, she is entitled to the benefits of her husband’s FEGLI policy. The insured’s ex-wife also claimed an entitlement to the proceeds based on California community property law.

Finally, Sheila Armstrong-Lofton and the insured’s son Mark claimed that the policy proceeds should be paid to them, because they are beneficiaries on the FEGLI policy.

The court ruled in favor of Sheila Armstrong-Lofton and the insured’s son Mark stating that any state law which conflicts with federal law, even in the area of domestic relations, will be preempted by federal law and since federal laws controlling this case require that payment be made to the designated beneficiaries, Sheila and Mark are the only two rightful recipients of the FEGLI proceeds.

The court held that FEGLIA, which controlled this case, required that the FEGLI policy benefits “be paid, on the establishment of a valid claim, to the person or persons surviving at the date of [employee’s] death, in the following order of precedence:

First, to the beneficiary or beneficiaries designated by the employee in a signed and witnesses writing received before death in the employing office …

Second, if there is no designated beneficiary, to the widow or widower of the employee.”[2]

California community property law, which provides for distribution of life insurance proceeds to anyone other than a designated beneficiary, is in actual conflict with FEGLIA and is preempted by FEGLIA. The court opined that Sheila Armstrong-Lofton and the insured’s son Mark should receive the FEGLI benefits because no other persons had an interest in the policy benefits pursuant to FEGLIA.

FEGLI claims are complex and require advice of a FEGLI lawyer. If you have questions about a FEGLI claim, please call a FEGLI attorney for a free consultation.

Call (888) 510-2212 for a free consultation.


[1] MetLife v. Armstrong-Lofton, 19 F. Supp. 2d 1134 (1998).

[2] 5 U.S.C. § 8705(a)