Section of Taxation Publications
  VOL. 58
NO. 3
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 Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.

Murdering the State Slayer Statute Under the Pretense of ERISA Preemption: Ahmed v. Ahmed
Peter S. Lin


“Fortunately for the state of marital relations in America, a plethora of cases discussing ERISA preemption when one spouse kills another spouse does not exist.” In Ahmed v. Ahmed, however, an Ohio appellate court addressed the issue of whether the Employee Retirement Income Security Act (ERISA) of 1974 preempted Ohio Revised Code section 2105.19 (the “Slayer Statute”) in determining the distribution of employer-provided life insurance benefits. The court was faced with a case in which the insured was killed by the primary beneficiary, thereby disqualifying him under the Slayer Statue from receiving the death benefits, but leaving uncertain the question of who should get the proceeds. The court held that ERISA did preempt the Slayer Statute and that federal common law must be applied because application of the Slayer Statute would frustrate ERISA’s objectives. In applying federal common law, the court determined that the plain language of the life insurance policy should dictate the distribution of its benefits. Because the plain language of the insurance contract did not address the specific situation, the court ruled that the proceeds should be paid to the deceased’s estate and not to the named contingent beneficiary. Although Ahmed is only binding precedent in Ohio, the court’s rationale in preempting the Slayer Statute could be persuasive in other jurisdictions because it is one of only a handful of cases to have addressed the issue since the U.S. Supreme Court decision in Egelhoff v. Egelhoff. Ahmed also highlights the importance of advising clients carefully when naming not only the primary but all the contingent beneficiaries. Moreover, federal tax liability issues are implicated because life insurance proceeds paid directly to a beneficiary are not included in the beneficiary’s gross income, whereas proceeds paid from an estate to a beneficiary are included in the gross estate and thus are subject to estate taxes.

This note analyzes the Ahmed court’s opinion and addresses its flaws. Part I provides an overview of the statutory framework. Part II summarizes the relevant facts. Part III analyzes (1) the scope of ERISA preemption, (2) the Ahmed court’s interpretation of Egelhoff, and (3) the creation of a constructive trust. Part IV concludes that the court not only incorrectly ruled that ERISA preempts the Slayer Statute but also erroneously distributed the plan proceeds according to its flawed analysis and stretched to reach a particular result by misinterpreting a U.S. Supreme Court opinion.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


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