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I live in Minnesota. My Ex-Spose reciently died. I kept a…

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Answer 1

Estate Lawyer: socrateaser, Attorney replied 9 years ago

Hello again,

Your research is interesting, but it doesn't change my answer -- though it does put a lot of things into play, so that really only a judge can determine the outcome of the issue. My thoughts:

1. The cases you cite are federal district court. They are only binding on Minnesota law to the extent that the cases resolve questions of federal law. From my review, this appears to be the question of the obligations of contracts clause in the U.S. Constitution, and to the extent that the clause entirely preempts the Minnesota Constitution's contracts clause, the federal court cites determine that issue as well.

The cite that I provided originally (Estate of Rock) is binding Minnesota law, though, the decision, rendered in 2000, may have been overturned by amendments to MN Stat. 524.2-804, enacted in 2002.

2. The federal district court in Lincoln has held that MN Stat. 524.2-804 does not offend the obligation of contracts, because in the view of the federal court, a life insurance policy beneficiary designation is not a contract with respect to the beneficiary. The beneficiary has no vested interest in the policy benefit, until the insured dies. However, the court in MONY differed with Lincoln, because the person paying for the policy was also the beneficiary -- so the statute interfered with the beneficiary's vested interest.

3. There is a third case that you did not discover: American General Life Insurance Company v. Amy Jenson, No. CIV. 11-5057-JLV (D.S.D. 03/12/2012). The case, which discusses South Dakota law, is based on a law that is substantially the same as the Minnesota statute, so the ruling is probably relevant. In Jenson, the court reviews several different lines of cases that have interpreted the Uniform Probate Code, and then held that the the ex-spouse is entitled to the policy benefit, based upon the existence of an implied oral contract between the insured and beneficiary.

4. In the MONY decision, the court goes to some length to note that while the model uniform probate code defines the term "governing instruments" to include life insurance policies, the Minnesota enactment does not. To wit:

Unlike the Oklahoma statute at issue in Whirlpool, it is not entirely clear to the Court that Section 524.8-204 applies to life-insurance policies. The statute -- which is "nearly identical to § 2-804 of the Uniform Probate Code," Lincoln Benefit Life Co. v. Heitz, 468 F.Supp.2d 1062, 1066 (D. Minn. 2007) -- by its terms applies only to a beneficiary designation in a "governing instrument." Minn. Stat. § 524.2-804, subd. 1(1). While the Uniform Probate Code expressly includes insurance policies within the definition of "governing instruments," see Unif. Probate Code § 1-201(18) (amended 1998), the term "governing instrument" is noticeably absent from the "definitions" section of the Uniform Probate Code as adopted by the Minnesota legislature, see Minn. Stat. § 524.1-201. One could argue that this omission was intentional and was designed to except insurance policies from the reach of the statute, but the legislative history appears to suggest otherwise, see Video of April 15, 2002 Minnesota House Floor Session, available at http://www.house.leg.state.mn.us/htv/archiveshfs.asp?ls_year=82 (last visited January 17, 2008) (indicating that Section 524.2-804 was intended to include life-insurance policies). Ultimately, however, the Court need not opine on this issue because Ericson has not argued in his Motion papers that life-insurance policies are beyond the reach of Section 524.2-804. Accordingly, the Court will assume (as the parties have) that the statute applies to beneficiary designations in such policies.

I have been unable to download the video stream from the cited source, so I don't know what the colloquy on the House floor stated -- however, were I a judge in this circumstance, I don't know that I would be willing to use that sort of commentary as the foundation for what the statute means by "governing instruments," when the actual law doesn't say what it means.

More important, in my opinion, is that in your case, there was a court order/decree (which may or may not have been created by a settlement agreement or stipulation between the parties -- and which would have created an actual contract) to maintain insurance, and that decree predated the 2002 amendment to MN Stat. 524.2-804. The argument thus devolves to whether or not the law, assuming that it does in fact void the beneficiary designation at divorce, springs back into life after the termination of the court order between the parties to the divorce decree, or whether the insured would have had to expressly remove the ex-spouse as beneficiary.

In my opinion, the intent of the parties and the court would have to govern in this case, and since the law at the time of the decree would have been that revocation of the beneficiary designation would have had to have been willful on the part of the insured/policy owner, the beneficiary designation was never revoked and so the ex-spouse is entitled to the policy benefit.

In other words, my answer is unchanged.

Note: I hope you appreciate how much additional time was required to try and flesh out this issue. I track my research time, and this little exercise required over 2.5 hours.

Anyway, if you could possibly consider an additional "contribution to the cause" here, I'd genuinely appreciate it. I'm working for less than minimum wage!

Happy New Year.

Answer 2

Estate Lawyer: socrateaser, Attorney replied 9 years ago

I can't bill you separately -- it violates the website rules. You can:

1. Provide a bonus/tip, if the system interface allows;
2. Provide an additional rating (or multiple ratings) of my separate answers;
3. Contact customer service and ask to pay whatever additional amount you wish.

Or, you can do nothing. I appreciate your confidence, regardless.

Best wishes.

Answer 3

Estate Lawyer: socrateaser, Attorney replied 9 years ago

California.

Answer 4

Estate Lawyer: socrateaser, Attorney replied 9 years ago

My anonymity is extremely important to me. I appreciate what you're trying to do, however, I don't want to start a war with the website management.

You can always ask new questions here, and I'll be happy to answer -- if I can.

I live in Minnesota. My Ex-Spose reciently died. I kept a…

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