US Supreme Court Finds That Minnesota Law Automatically Revoking Former Spouses' Life Insurance Beneficiary Designation Is Not Unconstitutional
However Court's Ruling May Have Minimal Impact In Illinois
According to Allison Bell of The National Law Journal, Mark Sveen, bought a life insurance policy in 1997 and in 1998 named his wife, Kaye Melin as primary beneficiary.
In 2002 Minnesota enacted a law that states that, unless a couple make other arrangements, the dissolution or annulment of a marriage revoked all of the couple’s revocable life insurance beneficiary designations.
Sveen and Melin divorced in 2007. Before revoking Melin's designation as life insurance beneficiary, Sveen died in 2011. Melin said that she and Sveen had agreed that he would continue to make her the beneficiary of the life insurance policy. The district court ruled that the 2002 Minnesota beneficiary designation fix law should apply and ordered the insurance company to pay the death benefits to Sveen’s children from another marriage.
In its June 11, 2018 ruling, the US Supreme Court found that the Minnesota law causes no substantial impairment to the contractual relationship between the policyholder and the insurer. According to Justice Kagan writing for the majority, "If an insured wants to keep a life insurance policy beneficiary designation in place after a divorce, he may do so by the simple act of sending a change-of-beneficiary form to his insurer."
Note however that Illinois law automatically revokes some beneficiary designations found in wills, trusts, and power of attorney orders following a divorce, unlike Minnesota law life insurance beneficiary designations survive a divorce unless a divorce decree includes a waiver of those rights and beneficiary designations are changed.
If you have questions about your divorce please contact Arlington Heights divorce attorney David Saxe today for a free consultation.