Alabama: Beneficiary Disputes and Interpleader Under Alabama Law

When Alabama law decides the dispute

Federal law controls ERISA employer plans and federal programs such as FEGLI and military life insurance, so check that first. See federal programs.

For an individual policy, Alabama courts generally apply the law of the state where the contract was made. In Modern Woodmen v. Harris, the insured applied for the policy in Alabama and the policy named no governing law, so a federal court applied Alabama law even though he had moved to Oklahoma and died there. It rejected the argument that the law of his domicile at death should control.¹ In Blalock v. Sutphin, the Alabama Supreme Court applied Alabama law rather than Tennessee law to a policy sold and delivered at the insured’s workplace in Tennessee, noting that he lived, divorced and died in Alabama and listed his Alabama address on the application.²

Divorce and ex-spouse beneficiaries

Alabama’s revocation-on-divorce statute follows the Uniform Probate Code. “Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the martial [sic] estate,” a divorce or annulment “revokes any revocable” disposition or appointment of property made by the divorced person to the former spouse in a governing instrument, including a beneficiary designation. It also revokes dispositions to the former spouse’s relatives.³

• What counts as the instrument. A “governing instrument” is one the divorced person signed before the divorce or annulment.
• Owner or premium-paying spouse. The statute “shall not apply to any insurance policy for which the former spouse is named beneficiary, if the former spouse is listed as owner of the policy or makes premium payments on the policy following the divorce or annulment.”
• Effect. The instrument is read as if the former spouse disclaimed the revoked provisions. Remarriage to the former spouse revives them.
• Payors. An insurer or other payor that pays the named beneficiary in good faith is not liable unless it received written notice of the divorce before paying. A former spouse who receives a payment the statute does not allow must return it, and the same applies if federal law preempts the statute.³

See Divorce.

Older divorces: does the statute reach back?

The statute was enacted in 2015 and took effect September 1, 2015.² It contains no retroactivity clause.¹

• Divorce after September 1, 2015. The statute applies even if the policy is older. In Blalock, the insured applied for the policy in 2011 and the divorce came in 2016. The Alabama Supreme Court held that the statute “did not retroactively impair any existing contractual obligations” but “created a prospective default rule, i.e., that a divorce effectively revokes any revocable beneficiary designation in favor of the former spouse, absent further action by the policyholder.”²
• Divorce before September 1, 2015. In Modern Woodmen v. Harris, the divorce came in 2003, about twelve years before the statute took effect. The court held that the statute had no effect, because a prospective rule triggered by divorce does not reach a divorce that happened first. The court also rejected the argument that the insured’s ten years of inaction after 2015 mattered: he had no need to restore a designation that was never revoked.¹

Sources:⁴¹

Slayer rule

“A named beneficiary of a bond, life insurance policy, or other contractual arrangement who abuses or feloniously and intentionally kills the principal obligee or the individual upon whose life the policy is issued may not receive any benefit under the bond, policy, or other contractual arrangement, and it becomes payable as though the killer or abuser had predeceased the decedent.”⁵

• Abuse. For this section, a person is treated as an abuser only if convicted of first- or second-degree elder abuse and neglect or financial exploitation of an elderly person.
• Conviction. A final judgment of conviction of felonious and intentional killing is conclusive. The statute does not state what standard applies without a conviction.
• Insurers. An insurer that pays under the policy terms is not liable under the section unless, before paying, it received written notice of a claim under the section at its home office or principal address.⁵

In Primerica v. Donley (N.D. Ala. 2019), the court applied § 43-8-253(c) and granted summary judgment to the primary beneficiary, who had not been arrested, charged or convicted, because the contingent beneficiaries relied “solely on the existence of an open investigation” and offered no credible evidence of her responsibility.⁶ See the decision summary.

See the slayer rule guide.

Simultaneous death

“Where the insured and the beneficiary in a policy of life or accident insurance have died and there is no sufficient evidence that they have died otherwise than simultaneously, the proceeds of the policy shall be distributed as if the insured had survived the beneficiary.”⁷ The rule does not apply where the insurance contract provides a different distribution or its own presumption of survivorship.⁸ See simultaneous death.

Interpleader in Alabama courts

Under Rule 22 of the Alabama Rules of Civil Procedure, persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead, even if their claims lack a common origin or the plaintiff denies liability. A party seeking interpleader may deposit the money with the court, and the court may then discharge it and continue the case between the claimants. The court may award reasonable attorney fees from the fund only if they were requested in a pleading.⁹ See interpleader in state court.

In federal court in Alabama, a 2026 interpleader over a brokerage TOD account worth about $10.25 million shows two points. The court would not proceed until the firm met the deposit-or-bond requirement, and it set a $90,000 bond instead of the $1,000 first proposed. It also held that a claimant who alleged forgery and undue influence but did not answer had forfeited her claim. The TOD forms themselves said they were governed by Florida law, and the court adopted the prevailing parties’ statement of the law without separately discussing it. See Raymond James v. Medina.

Not yet reviewed. This page does not yet cover Alabama’s rules on changing a beneficiary or interest on delayed death claims. Absence here does not mean Alabama has no such rule.

Decisions

Related guides

• State law differences
• Illinois
• Divorce and beneficiary designations
• Slayer rule
• Glossary

Footnotes

1. Modern Woodmen of America v. Harris, No. 7:26-cv-00239-EGL (N.D. Ala.): memorandum opinion and order, ECF No. 30 (Aug. 20, 2026), at 5, 7, 10–13, court order (PDF); final judgment, ECF No. 31 (Aug. 20, 2026), court judgment (PDF); disbursement order, ECF No. 33 (Sept. 1, 2026). ↩ ↩² ↩³ ↩⁴

2. Blalock v. Sutphin, 275 So. 3d 519 (Ala. 2018), No. 1170879 (Oct. 26, 2018). FindLaw (unofficial). The effective date and Act number are as stated in the opinion. ↩ ↩² ↩³

3. Ala. Code § 30-4-17 (Act 2015-312). Alabama Legislature. ↩ ↩²

4. American General Life Ins. Co. v. Martin, No. 1:22-cv-04422 (N.D. Ill. Dec. 3, 2024). Justia (unofficial). ↩

5. Ala. Code § 43-8-253. Alabama Legislature. ↩ ↩²

6. Primerica Life Ins. Co. v. Donley, No. 3:18-cv-00995-AKK (N.D. Ala.): final judgment, ECF No. 40 (Oct. 30, 2019), at 1–3, court judgment (PDF); order granting discharge and fees, ECF No. 38 (Oct. 22, 2019), court order (PDF); order appointing guardian ad litem, ECF No. 21 (Feb. 4, 2019); order granting deposit, ECF No. 6 (July 16, 2018). ↩

7. Ala. Code § 43-7-5. Alabama Legislature. ↩

8. Ala. Code § 43-7-7. Alabama Legislature. ↩

9. Ala. R. Civ. P. 22. Alabama Judicial System (PDF). ↩