Marriage Does Not Create a “Presumptive Right” to a Deceased Spouse’s Life Insurance Benefits

Marriage Does Not Create a "Presumptive Right" to a Deceased Spouse's Life Insurance Benefits

A New Jersey appeals court rejected a surviving spouse’s public policy argument to adopt a rule that marriage creates a “presumptive right” to a deceased spouse’s life insurance benefits when someone else was designated as the beneficiary of the policy, holding that the creation of any such presumptive right would have to come from the Legislature. Fox v. Lincoln Financial Group, Docket No. A-3189-13T4 (App. Div., February 224, 2015) 

Michael Fox, a truck driver, had a life insurance policy from Lincoln Financial Group that was worth $100,000. Initially, Michael designated his then-wife, Gail, as primary beneficiary, and his brother, Kenneth, as contingent beneficiary. Michael and Gail subsequently divorced, and Michael executed an insurance company form designating his sister, Mary Ellen Scarpone, as sole beneficiary. 

Years later, Michael married Evanisa Fox, a Brazilian national. Michael then began the process of helping Evanisa become a naturalized U.S. citizen. He also signed a federal immigration form guaranteeing that he would support Evanisa at 125% of the poverty level. However, Michael did nothing toward changing the beneficiary of the life insurance policy from his sister to his new wife before he died in an accident. 

After Michael’s death, Evanisa filed a claim against Scarpone and Lincoln Financial Group for the life insurance proceeds, claiming it would be extremely difficult for her to survive without Michael’s life insurance proceeds. In lieu of filing an answer, Scarpone moved to dismiss the complaint. Evanisa cross-moved for summary judgment, arguing that the Court should adopt a rule that, where an insured designates someone else as a policy beneficiary, and the insured thereafter marries, there should be a presumption that the insured intended to revoke that earlier policy designation. 

The trial court dismissed Evanisa’s complaint, awarding the insurance proceeds to Scarpone, the designated beneficiary under the policy. The court ruled that New Jersey law requires an objective showing that the deceased intended to change the policy’s beneficiary, and that the complaint failed to allege sufficient facts to make the required showing. The court also found no duty obligating Michael to support Evanisa following his death. 

Evanisa appealed. She argued for a change in the law in that, as the spouse of the decedent, she is entitled to the proceeds of the insurance policy, even if someone else is the named beneficiary. Evanisa also asserted that Scarpone should bear the burden of establishing that Michael’s failure to change the beneficiary designation was intentional. 

The appeals court affirmed, holding that Evanisa’s public policy argument based on her marriage to Michael, without more, is insufficient to defeat Scarpone’s beneficiary status. The court held that a beneficiary designated in an insurance policy will be denied the right to receive the insurance proceeds only under limited circumstances under New Jersey law. For example, (1) There is a presumption in the law that a divorced spouse should no longer be the beneficiary of a deceased ex-spouse’s life insurance benefits, even if he or she was still listed as the beneficiary, based on the Vasconi v. Guardian Life Insurance Company case;  (2) The beneficiary designated in an insurance policy will be denied the insurance proceeds when it can be  shown that the deceased intended to change the policy’s beneficiary, but died before actually changing the beneficiary based on the DeCeglia v. Estate of Colletti case; and, (3) N.J.S.A. 3B:5-15 provides an intestate share to a surviving spouse omitted from a premarital will because of the presumption that the spouse who wrote the will intended to provide for the spouse. This “omitted spouse” statute applies only to wills, and does not extend to nonprobate assets such as a life insurance policy. The appeals court refused to make any change allowing more exceptions in the law. The court indicated that “so drastic a change [in the law should be left] to the Legislature.” 

The case is annexed here – Fox v. Lincoln Financial Group

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