In Estate of Malloy, 288 P.3d 597 (Utah App. 2012), the court of appeals affirmed the district court’s ruling that the decedent’s divorce did not revoke the designation of his former spouse as the beneficiary under his life insurance policy because the express terms of the insurance manual stated that divorce alone would not constitute a revocation.
The decedent married Wife A in 1989. The following month, he purchased a $50,000 federal employees group life insurance policy and designated Wife A as the beneficiary. The decedent and Wife A were divorced in 2004. In 2006, the decedent married Wife B. He died in 2009 without having changed the beneficiary designation. The insurance company paid the death benefit to Wife A, and Wife B brought an action arguing that the divorce revoked the beneficiary designation.
Utah Code §75-2-804 provides that a divorce revokes all revocable dispositions of property to the former spouse, except as provided in the governing instrument. In this case, the insurance policy and the beneficiary election form were silent on the subject, but the insurance policy manual expressly provided that divorce alone would not revoke the beneficiary designation, and further stated that the owner of the policy would have to complete a new beneficiary designation election form in order to remove a former spouse as a beneficiary. The district court ruled that the insurance manual was incorporated by reference into the beneficiary election form, and the court of appeals declined on procedural grounds to disturb that ruling.
For a discussion of estate planning in Utah, see Basic Utah Estate Planning on this website. For a discussion of the effect of a divorce on an estate plan, see the blog: “Divorce and Estate Planning in Utah” on this site.
Rust Tippett is the author of this blog post.
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This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, LLC. The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.