                          In the
 United States Court of Appeals
              For the Seventh Circuit
                       ____________

No. 02-2984
ALEXANDRIA M. MELTON, a minor,
by and through her mother
and next friend, JUDY M. MELTON,
                                         Plaintiff-Appellant,
                             v.

PEGGY D. MELTON, DEERE & COMPANY, and
LIFE INSURANCE COMPANY OF NORTH AMERICA,
                                      Defendants-Appellees.
                       ____________
         Appeal from the United States District Court
                for the Central District of Illinois.
        No. 02 C 4007—Joe Billy McDade, Chief Judge.
                       ____________
    ARGUED JANUARY 22, 2003—DECIDED APRIL 8, 2003
                   ____________


  Before FLAUM, Chief Judge, and MANION and WILLIAMS,
Circuit Judges.
  FLAUM, Chief Judge. Plaintiff Alexandria Melton, the
minor daughter of deceased Richard Melton and his for-
mer wife Judy Melton, and Defendant Peggy Melton,
Richard Melton’s most recent ex-wife, both claim entitle-
ment to the group term life insurance proceeds from Rich-
ard Melton’s employee benefits plan, which is regulated
by the Employee Retirement Income Security Act of 1974
2                                               No. 02-2984

(“ERISA”), 29 U.S.C. § 1001 et seq. Alexandria Melton ar-
gues that under Illinois state law, namely by designation
in her parents’ divorce agreement, she is the rightful
beneficiary of Richard Melton’s life insurance policies. The
district court disagreed, finding that ERISA preempts
Illinois law with respect to the status of beneficiaries
under ERISA-governed employee benefits plans. Since
Peggy Melton was the named beneficiary of Richard Mel-
ton’s ERISA-regulated employee group term life insurance
policy at the time of his death, the district court held that
Peggy Melton was entitled to receive the proceeds from
this insurance policy. We affirm.


                     I. BACKGROUND
  Alexandria Melton is the 14-year-old daughter of Rich-
ard Melton, who died on December 31, 2001, and Judy
Melton, who was married to Richard from 1986 until their
divorce in 1989. Richard and Judy’s divorce agreement
required Richard to maintain all then-existing life insur-
ance policies in the names of Alexandria and his two
other minor children from a prior marriage for “so long
as he owes the duty of support for each of the minor chil-
dren.”
   Richard married Peggy Melton in 1993. During their
marriage Richard named Peggy as the primary bene-
ficiary of his employee benefits plan, which included group
term life insurance benefits. Richard and Peggy divorced
in May 2001. Their divorce agreement contained a blan-
ket revocation of their interests in all financial and prop-
erty rights arising “by reason of their marital relation”
and “any asset assigned to a party by this agreement”
including “annuities, life insurance policies,” and other
financial instruments. This general waiver did not ex-
pressly name Richard’s employee group term life insurance.
No. 02-2984                                               3

  Prior to his death Richard worked for Deere & Company,
whose employee benefit plans are governed by ERISA.
The plan in which Richard participated required him to
designate a beneficiary to receive payment of his benefits
upon his death. The plan expressly provided that an
employee’s group life insurance benefits would be paid in
a lump sum to the named beneficiary if the employee died.
The plan further warned employees to “keep your benefi-
ciary designation current” and “make sure these benefits
go to the person(s) of your choosing.” Although Richard
and Peggy divorced six months before Richard died, Peggy
was still the named beneficiary of Richard’s employee
group term life insurance policy.
  Alexandria filed suit in Illinois state court seeking to
impose a constructive trust upon the proceeds of Rich-
ard’s group life insurance payable to Peggy as the named
beneficiary. Peggy sought and obtained removal of the
case to federal district court because the claim asserted a
federal question: namely, whether ERISA preempts state
law in determining the beneficiary of insurance benefits
under an ERISA-regulated employee benefits plan. The
district court adopted the recommendation of the magis-
trate judge denying Alexandria’s motion to remand the
case to state court and also granted Peggy’s motion for sum-
mary judgment on the merits. Alexandria now appeals.


                       II. ANALYSIS
  We review the district court’s grant of summary judg-
ment de novo, viewing all facts and drawing all reasonable
inferences in favor of the nonmoving party. Sprague v.
Central States, Southeast & Southwest Areas Pension Fund,
269 F.3d 811, 815 (7th Cir. 2001). Alexandria raises two
issues in her appeal to this court. First, she argues that
ERISA does not preempt Illinois state family law and
therefore the divorce agreement between her parents,
4                                                No. 02-2984

which designated her the beneficiary of Richard’s life
insurance policies, should control the disbursement of pro-
ceeds from Richard’s ERISA-governed group term insur-
ance policy. Second, she insists that Peggy cannot be the
rightful beneficiary of the proceeds because Peggy waived
any interest she might have had in Richard’s group insur-
ance policy by the terms of her own divorce agreement
with him. We reject both of these arguments and affirm
the district court’s decision that Peggy is the proper benefi-
ciary of the proceeds from Richard’s group term life insur-
ance.


A. Preemption
   ERISA preempts all state laws “insofar as they may now
or hereafter relate to any employee benefit plan” which
is subject to ERISA. 29 U.S.C. § 1144(a). In Egelhoff v.
Egelhoff, 532 U.S. 141 (2001), the Supreme Court held that a
Washington statute was expressly preempted by ERISA
where it required plan administrators to pay beneficiaries
as determined by state family law rather than by plan
documents. Id. at 146-47. The Court reasoned that the
statute was impermissibly connected with ERISA because
it bound ERISA plan administrators to a particular choice
of state law rules for determining beneficiaries, thereby
implicating an area of “core ERISA concern.” Id. at 147.
Additionally, the Court found that the statute ran counter
to ERISA’s command that employee benefit plans “specify
the basis on which payments are made to and from the
plan,” § 1102(b)(4), and that fiduciaries administer the
plan “in accordance with the documents and instruments
governing the plan,” § 1104(a)(1)(D), by making payments
to a “beneficiary . . . designated by a participant, or by
the terms of [the] plan.” § 1002(8). Further, the statute
was found to interfere with one of the principal goals of
ERISA, which is “to enable employers ‘to establish a uni-
No. 02-2984                                                5

form administrative scheme, which provides a set of stan-
dard procedures to guide processing of claims and dis-
bursement of benefits.’ ” Egelhoff, 532 U.S. at 148 (quoting
Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9 (1987)).
  Very recently, in Metropolitan Life Ins. Co. v. Johnson,
297 F.3d 558 (7th Cir. 2002), we applied the Supreme
Court’s reasoning in Egelhoff to uphold the distribution
of proceeds from an ERISA-regulated employee benefits
plan to the beneficiaries named by the deceased in the
plan documents. In Johnson we said that “Egelhoff stands
for the proposition that a state law cannot invalidate an
ERISA plan beneficiary designation by mandating dis-
tribution to another person.” Johnson, 297 F.3d at 566. On
that basis we held that ERISA preempted the Illinois
state law doctrine of substantial compliance to the extent
that it affected the status of beneficiaries named in the
deceased’s ERISA-regulated employee benefits plan. Id.
   In this case Alexandria seeks to invoke the Illinois
state law doctrine of constructive trusts to prevent the
named beneficiary, Peggy, from receiving the proceeds
of Richard’s ERISA-regulated group term life insurance
and to apply Illinois state family law to recognize her as
beneficiary of Richard’s insurance policy. This presents
a factual situation nearly identical to Egelhoff and Johnson,
where the plaintiffs desired to invoke state law doctrines
to their advantage in determining their status as bene-
ficiaries under ERISA-regulated employee benefits plans.
Though Alexandria emphasizes that a presumption against
preemption exists in the area of state family law, we do
not hesitate to find that presumption rebutted where, as
here, Congress has made its preemption intention clear
in the language of the statute, the Supreme Court has
affirmed that intent, and we have applied the rule in similar
cases. See 29 U.S.C. § 1144(a); Egelhoff, 532 U.S. at 151;
Johnson, 297 F.3d at 566. We therefore hold that ERISA
preempts Illinois state law with respect to determining
6                                               No. 02-2984

the rightful beneficiary of Richard’s ERISA-regulated
group term life insurance policy. Since Richard’s ERISA-
regulated employee benefits plan determines beneficiary
status according to the person(s) named in the plan docu-
ments, we also find that Peggy is the proper beneficiary
of the insurance policy.


B. Waiver
   Having determined that Peggy, and not Alexandria, is
the beneficiary of Richard’s group term life insurance pol-
icy, we still must address Alexandria’s contention that
Peggy waived her interest in these benefits by the terms
of her divorce agreement with Richard. Even where ERISA
preempts state law with respect to determining bene-
ficiary status under an ERISA-regulated benefits plan,
ERISA does not preempt an explicit waiver of interest
by a nonparticipant beneficiary of such a plan. Fox Valley
& Vicinity Construction Workers Pension Fund v. Brown,
897 F.2d 275, 282 (7th Cir. 1990) (en banc). We noted in
Fox Valley that ERISA is silent on the issue of what con-
stitutes a valid waiver of interest and we therefore turned
to federal common law and Illinois state law to fill the
gap. Id. at 280. See also Johnson, 297 F.3d at 567 (condon-
ing use of state law to inform federal common law on
topics about which ERISA is silent). The rule that emerged
required proof of a specific termination of the rights in
question in order to effectively waive a beneficiary’s inter-
est under an ERISA-regulated plan. Id. Another formula-
tion of this principal mandates that an attempted waiver
by a designated beneficiary of an ERISA-regulated bene-
fits plan be “explicit, voluntary, and made in good faith” to
be considered valid. Manning v. Hayes, 212 F.3d 866,
874 (5th Cir. 2000). Essentially, when we are evaluating
whether the wavier is effective in a given case, we are
more concerned with whether a reasonable person would
No. 02-2984                                                7

have understood that she was waiving her interest in the
proceeds or benefits in question than with any magic
language contained in the waiver itself. See, e.g., Clift
v. Clift, 210 F.3d 268, 271 (5th Cir. 2000).
  In Fox Valley we found that a property settlement between
the parties stating that they each waived “any interest or
claim in and to any retirement, pension, profit-sharing
and/or annuity plans resulting from the employment of
the other party” constituted a valid waiver of the desig-
nated beneficiary’s interest in the proceeds of the de-
ceased’s ERISA-regulated benefits plan. Fox Valley, 897
F.2d at 277. But in Manning, the Fifth Circuit found no
waiver of a designated beneficiary’s interest in the de-
ceased’s ERISA-regulated benefits where the terms of
a divorce decree stated only that “no community property
other than personal effects has been accumulated by the
parties,” that such property was to be “awarded to the
party having possession,” and that the division of prop-
erty was to be “made pursuant to the terms” of the par-
ties’ prenuptial agreement. Manning, 212 F.3d at 870.
Although the prenuptial agreement in Manning contem-
plated dividing the parties’ property according to owner-
ship prior to marriage and contained a promise by each
party to avoid co-mingling individual with community
property, it made no mention in particular of employee
benefits, or insurance proceeds, or the disputed ERISA-
regulated insurance policy. Id. at 869.
   In this case, the divorce agreement between Peggy and
Richard contained a blanket revocation of their interests
in all financial and property rights arising “by reason of
their marital relation” and in “any asset assigned to a par-
ty by this Agreement, if evidenced by an instrument nam-
ing the non-owning party a beneficiary” including “annu-
ities, life insurance policies,” and other kinds of financial
instruments. Importantly, this waiver does not expressly
identify Richard’s ERISA-regulated employee group term
8                                               No. 02-2984

life insurance; unlike the waiver we found effective in
Fox Valley, the waiver here never mentions employment-
related benefits at all. Instead, like the divorce agree-
ment in Manning, this agreement is quite specific as to
the division of certain assets and property, but notice-
ably silent as to the distribution of others. Richard and
Peggy’s divorce agreement specifically assigns several as-
sets between the parties, such as the marital residence,
hunting property, motor vehicles, pension plans, personal
property, and bank accounts, but nowhere does it men-
tion or assign Richard’s employee benefits, including the
disputed group term life insurance policy. Moreover, Rich-
ard’s ERISA-regulated employee benefits are not prop-
erty arising “by reason of their marital relation,” a term
which refers to property rights legally vested through the
act of marriage and not assets simply acquired during
the marriage. Given these facts, we conclude that the
language of this waiver is not sufficiently explicit to oper-
ate as a waiver of Peggy’s interest in Richard’s ERISA-
governed benefits.


                     III. CONCLUSION
  Because ERISA preempts Illinois state law with respect
to determining the status of beneficiaries under ERISA-
regulated employee benefits plans, we conclude that
Peggy Melton, as the named beneficiary in the plan doc-
uments, is the proper beneficiary of Richard Melton’s
employee group term life insurance policy. We further find
that Peggy Melton has not waived her interest in the
proceeds of this insurance policy by the terms of her
divorce agreement with Richard Melton. We therefore
AFFIRM the district court’s grant of summary judgment
in favor of Peggy Melton.
No. 02-2984                                         9

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit




               USCA-02-C-0072—4-8-03
