Court Rejects Marital Presumption for Life Insurance Proceeds

February 26, 2015 – In The News
New Jersey Law Journal

Benjamin Kurtis was quoted in the New Jersey Law Journal article “Court Rejects Marital Presumption for Life Insurance Proceeds.” Full text can be found in the February 26, 2015, issue, but a synopsis is below.

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 said that the creation of any such presumptive right would have to come from the Legislature.

After his divorce, Michael Fox designated his sister, Mary Ellen Scarpone, as the sole beneficiary of his policy. Fox did not change the beneficiary of the life insurance policy from his sister to his new wife before he died.

After his death, Fox’s wife, Evanisa, 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 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. The Court rejected it.

Scarpone’s attorney, Benjamin Kurtis, said the appeals court made the correct call.

“We think the law was very clear and that the deceased took no action to change the beneficiary. He clearly knew how to do so because he had done so before,” said Kurtis

“This is not the kind of issue that should be resolved by the court,” Kurtis said. “It’s an issue best addressed by the Legislature.”