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A new entry by Michael D. Dittberner: Life Insurance provisions in divorce proceedings – safeguard or pitfall?

The recent unpublished opinion of the Minnesota Court of Appeals in Hall v. Reynolds, No. A17-1095, 2018 WL 700191 (Minn. App. Feb. 5, 2018) provides a lesson in how life insurance provisions in divorce decrees are enforced by district courts.   In Hall, the decedent was ordered in his divorce decree to name his ex-wife as sole  beneficiary of a $100,000 life insurance policy.  However, he named his mother, and later his  fiancée as primary beneficiary of both of his life insurance policies in violation of the decree.  After he passed away, his fiancée received proceeds from the policies totaling $530,412.22 and his ex-wife brought an action for a constructive trust claiming unjust enrichment.  After the district court granted summary judgment in favor of the fiancée, the ex-wife appealed to the court of appeals, which reversed the district court.  The court of appeals held  that an obligor’s violation of a court-ordered obligation to maintain life insurance in a specific amount is enough to impose a constructive trust or to claw back insurance proceeds when a court-ordered beneficiary does not receive the amount or policy to which they are entitled.  In addition, the court of appeals, citing Head v. Metropolitan Life Ins. Co. 449 N.W. 2d 449 (Minn. App. 1989) and Thiebault v. Thiebault, 421 N.W. 2d 747 (Minn. App. 1988), held that the ex-wife could claim an amount in excess of the child support remaining to be paid because the decree’s requirement of a $100,000 policy controlled how much was due.

While reviewing this decision, I read up on other decisions relating to the issue of life insurance and marital dissolution proceedings, and what follow are some useful practice tips and questions based on Hall v. Reynolds and these other decisions



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