SPOUSAL DEATH BENEFIT STATUTE CHANGING BENEFICIARY UPON DIVORCE – FEGLI – FEDERAL PREEMPTION. Contrary to the rulings of a majority of state courts, the Virginia Supreme Court held in Maretta v. Hillman, ___ Va. App. ___, ___ S.E.2d ___, 26 VLW 58 (1/13/12) that yes, Virginia, the federal statutory law that awards even a divorced widow, even in our Commonwealth, the late husband’s Federal Employees’ Group Life Insurance (FEGLI), overrides Va. Code §20-111.1(D), denies those benefits to a new wife and now widow, and does not require the payback to the new spouse that §20-111.1(D) would otherwise dictate. After all, the majority said, the FEGLI statute, 5 U.S.C. §8701 et seq. has a provision, §8709(d)(1), which expressly preempts state legislation to the contrary, and a definite scheme of priorities for the award of the benefits under §8705(a). The opinion also states that the Virginia Supreme Court is well aware that it is taking the minority position among states. Justices McClanahan and Millette dissent, holding that the federal statute cannot preempt the payback provision of Virginia Code §111.1(B), which has itself wording that says that it operates when there has been a federal preemption. The majority thinking was that allowing the payback requirement would directly frustrate the intent of Congress, but the dissenters believe that Virginia is free to create an equitable claim for compensation under its domestic relations laws, which, after all, have always been regarded as matters of state law.