As set forth above, the retirement account at issue in our hypothetical is governed by ERISA, which provides that where a pension plan participant dies before retirement, their “surviving spouse” shall be paid a benefit, but the right to a survivor benefit ends at the spouse’s death. 29 U.S.C. § 1055(e)(l).
A state law is preempted if its application “conflicts with the provisions of ERISA or operates to frustrate its objects,” and ERISA preempts state laws “insofar as they … relate to any employee benefit plan.” 29 U.S.C. § 1144(a); Boggs v. Boggs (1997) 520 U.S. 833, 841.
Thus, the administrator is faced with the question: Does ERISA preempt California’s state laws in the determination of what happens to community property when both spouses die at the same time?
First, the administrator finds that ERISA would preempt California Probate Code 6402.5, as both were in direct conflict with each other. Specifically, the latter statute provides that when a surviving spouse post-deceases a deceased spouse by less than five years, the surviving spouse’s heirs receive the surviving spouse’s portion of the decedent’s estate.
By contrast, under ERISA, the right to survivor benefits ends at the deceased spouse’s death. Given this conflict, ERISA would preempt California law. However, as set forth above, Probate Code 6402.5(b) does not apply to our hypothetical, as there can be no determination that either Harry or Wanda predeceased the other.
ERISA, conversely, would not preempt application of California Probate Code 220 if the latter section were interpreted to result in the entire account passing to Harry’s estate, as there is no conflict between their respective results.
On the other hand, ERISA would absolutely preempt California Probate Code 220 if the latter were deemed to result in the account passing solely to Wanda’s estate. However, as California Probate Code 220 does not dictate this matter, as discussed above, this statute’s harmony with ERISA, or lack thereof, is immaterial.
As previously mentioned, Probate Code section 103 directly controls this situation, establishing that when the order of spouses’ respective deaths cannot be determined, one-half of the community property shall be distributed as if the first spouse had survived the second, and the other half shall be distributed as if the second spouse had survived the first.
This statute directly controls the issue of what happens to community property when both spouses die at the same time, an issue on which ERISA is completely silent. As Section 103 does not conflict with ERISA, preemption is not an issue, and both Harry and Wanda’s estates can each receive a one-half interest in the account.
