Life Insurance Proceeds | Change of Beneficiary After Divorce

Concluding that this case was nearly identical to Sweebe and compelled the same result, the court affirmed the trial court's order granting the plaintiff-PR (the decedent's daughter) summary disposition in this dispute over entitlement to the decedent's life insurance benefits.

The defendant was the decedent's ex-wife. She and the decedent were married in 2000. During their marriage the decedent completed a beneficiary designation form designating defendant as the primary beneficiary of a life insurance policy. They divorced in 2003 pursuant to a consent judgment signed by both parties and entered in the trial court. The decedent died in 2010 without having changed the beneficiary designation on the life insurance policy.

Both plaintiff and defendant made claims for the life insurance benefits. The insurer determined that the proceeds of the policy were payable to defendant because she was the last named beneficiary and disbursed the proceeds to her. Plaintiff filed this action against defendant alleging breach of contract and seeking a declaratory judgment ordering that the life insurance benefits were payable to the decedent's estate pursuant to a waiver provision in the consent judgment of divorce. The waiver provision stated that "any right either party has to the proceeds or other benefits of policies or cont[r]acts of life insurance . . . upon the life of the other as a named beneficiary . . . are extinguished unless provided for elsewhere in this judgment."

The court concluded that as in Sweebe, "defendant clearly and unequivocally waived her right to the decedent's life insurance benefits when she signed the consent judgment of divorce containing the waiver provision." By executing the consent judgment, she acknowledged and agreed that any right she had to the benefits was "extinguished." Thus, pursuant to the language of the provision, she was not entitled to retain the life insurance proceeds.

The court held that Defendant's argument that she and the decedent, through their words and deeds, modified the consent judgment in the years after their divorce lacked merit. The court noted that a consent judgment is in the nature of a contract, and in general, they "are final and binding upon the court and the parties, and cannot be modified absent fraud, mistake, or unconscionable advantage." There was no allegation of fraud, mistake, or unconscionable advantage.

Further, as recognized in Laffin, the consent judgment was binding not only on the parties, but also on the trial court. If defendant and the decedent intended to modify the consent judgment, they could have sought a modification of the consent judgment in the trial court after their divorce. It was undisputed that they failed to do so. They also "failed to take any other concrete, post-divorce affirmative action to designate defendant as the beneficiary. For example, the decedent could have simply redesignated her as the beneficiary. Absent any proactive, affirmative action in this regard, the trial court properly enforced the waiver provision in the consent judgment of divorce."

Read the case here: Download Partlow_v_Person

See also Sweebe v Sweebe, 712 N.W.2d 708, 474 Mich. 151 (2006), decided by the Michigan Supreme Court. Download Sweebe_v_Sweebe

And see Laffin v Laffin, 760 N.W.2d 738 280 Mich. App. 513 (2008)  Download Laffin_v_Laffin

See also Moore v Moore Download Moore v Moore [700 N.W.2d 414, 266 Mich. App. 96 (Mich App 2005)

Comments

[Jean le voyant]

Thank you for this article.

Living after a divorce is really difficult sometimes, and it's difficult to find good informations on the web.

Great website!