R.I. Supreme Court Rules on Post-Divorce Life Insurance Case
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By
McIntyre Tate LLP
The Rhode Island Supreme Court recently decided an interesting post divorce
property division case. The parties had reached an agreement whereby they
would "cash in forthwith" life insurance policies, annuities,
and investment policies and equally divide them. However, prior to the
service of the divorce summons on this husband, he had already changed
the beneficiary designations on his life insurance policy to replace his
wife and name his uncle. Shortly after the parties divorce hearing (but
before the Family Court final judgment entered) the husband died. As a
beneficiary of the life insurance policy, husband's uncle claimed
the $375,000 policy. When the insurance company balked at paying, he sued
the insurance company and the wife. The Supreme Court ruled that because
the husband did nothing wrong at the time he changed the beneficiary designation
on the life insurance policy (three days before he was served with the
Family Court divorce complaint) the divorce action "abates"
due to the death of one of the spouses. Therefore, so too did the order
requiring the division of their property. The court further found that
husband was "within his rights when he changed the beneficiary of
his life insurance policy" because he had not yet been served with
the divorce complaint. Accordingly, the wife's interest in the divorce
decree was defeated.
