New Jersey Court Rejects Marital Presumption for Life Insurance Proceeds

Does being married to a deceased spouse create an assumption that the surviving spouse be the beneficiary even if the policy named another? Read the latest ruling on this below…

Michael Booth, New Jersey Law Journal

February 26, 2015   

A New Jersey appeals court has refused to create a bright-line rule that says marriage creates a presumptive right for a spouse to receive the benefits of his or her partner’s life insurance benefits if the deceased previously had designated someone else as the beneficiary.

A three-judge Appellate Division panel, in a Feb. 24 published decision in Fox v. Lincoln Financial Group, said the creation of any such presumptive right would have to come from the Legislature.

The ruling involves a Brazilian national, Evanisa Fox, who married a Morris County, New Jersey, man, Michael Fox, in July 2012, according to the opinion. He previously had been married to another woman, identified in the ruling only as Gail.

Fox, a truck driver, had a life insurance policy through his employer that was worth about $100,000, the opinion said. After his divorce from Gail, Fox in 1996 designated his sister, Mary Ellen Scarpone, as the sole beneficiary of his policy.

After Michael Fox and Evanisa Fox married, he began taking steps to have her become a naturalized citizen, including signing a federal immigration form guaranteeing that he would support her at 125 percent of the poverty level, the opinion said.

He did nothing, however, toward changing the beneficiary of the life insurance policy from his sister to his new wife before he died in an accident on Nov. 9, 2012.

After his death, Evanisa Fox filed a claim against Scarpone and Lincoln Financial Group, which issued the policy, for the life insurance funds, saying it would be “‘extremely difficult for me to survive without his support,’” the opinion said.

Scarpone challenged the claim. Superior Court Judge Stephan Hansbury dismissed Evanisa’s claim, saying there was no statutory basis to change the beneficiary of a life insurance policy merely because of marriage, absent some affirmative effort to do so by the policyholder before death.

Evanisa Fox appealed, asking the Appellate Division to create a bright-line rule that a spouse has a presumptive right to a partner’s life insurance policies, even if someone else is the named beneficiary.

“We reject Evanisa’s broad public policy argument, and hold that her marriage to Michael, without more, is insufficient to defeat Scarpone’s beneficiary status,” Appellate Division Judge Harry Carroll said. Judges Carmen Alvarez and Alexander Waugh Jr. joined in the ruling.

Carroll said the appeal presented a single question: “[S]hould … the law of insurance reflect the changed circumstances attendant to marriage in the way it reflects changed circumstances with respect the divorce?”

The appeals court refused to make that change in the law.

“We decline to do so, and would instead leave so drastic a change to the Legislature,” Carroll said.

Carroll noted that the Legislature enacted N.J.S.A. 3B:3-14, which provides that divorce automatically revokes a disposition of property made by a divorced spouse to his or her former partner in a “governing instrument,” which he said by definition includes an insurance policy.