Life Insurance Beneficiaries and Divorce
Guest post by Makeda Fikremariam
Commonly the Supreme Court doesn’t hear cases regarding domestic relations, but Sveen v. Melinchanged that pattern. Mark Sveen had been married to Kaye Melin for 10 years when they divorced in 2007. During their marriage, Sveen had made Melin his primary beneficiary on his life insurance. Also during that time, in 2002, Minnesota passed the Revocation-upon-divorce statute which automatically removes an ex-spouse from the insurance once the owner has passed. The complication arose because Sveen had passed in 2011, but his insurance was signed before the statute was in order and Melin was still listed. The argument became, does applying the statue after the contract was signed violate the Contract Clause?
This was passed to the Supreme Court as the lower courts disagreed on who should remain listed on the policy. The District Court sided in favor with the children, naming them the primary beneficiaries,while the 8th Circuit agreed with Melin. There’s a two step process in determining the constitutionality of this application. However, the Supreme Court felt that it didn’t violate the first step as the statute did not impair the pre-existing contractual goal and expectations. They also noted that the statute serves as a default, as the policyholder could submit a form to retain their ex-spouse. Justice Gorsuch, in his dissenting opinion, was against this point as he found that the law should redirect owners to ensure attentiveness in regards to their policy. He also noted that there are people who wish to keep their ex-spouses listed for a variety of reasons. For more information, please read Naomi Cahn’s piece in the George Washington’s Law Review: https://www.gwlr.org/sveen-v-melin/.