Delaware: Beneficiary Disputes and Interpleader Under Delaware Law

The slayer statute is offense-based

Many states define a slayer by conduct, such as a felonious and intentional killing. Delaware ties its rule to the criminal code. Under 12 Del. C. § 2322(a)(3), a slayer is a person who “pleads guilty or nolo contendere to or is convicted of” specified offenses under 11 Del. C. §§ 632, 635, and 636, which are manslaughter and murder offenses. The definition excludes manslaughter under § 632 that results from extreme emotional distress under § 641.¹

A conviction is not the only route. The definition also covers a person found responsible by a determination “beyond a reasonable doubt by a court of competent jurisdiction”.¹ That is a higher standard than the preponderance test in uniform-code states such as Alaska and South Dakota.

Where the money goes. Under § 2322(h)(1), insurance proceeds are “paid according to the terms of the contract as though the slayer had predeceased the decedent”, and go to the decedent’s estate if the contract names no alternate beneficiary.¹

Insurer protection. Under § 2322(h)(3), an insurer that pays under the policy is not subject to added liability for a payment “made without written notice of the conviction of the slayer”.¹ A claimant who believes the named beneficiary is responsible should give written notice early. See how a claim freezes payment.

Divorce: the will-only rule

12 Del. C. § 209 revokes provisions for a former spouse when a marriage ends, but it addresses wills.² Editors did not find a Delaware statute that does the same for a life insurance policy or annuity. Where no statute applies, the policy terms and any divorce settlement usually decide whether a former spouse still takes. See divorce and beneficiary designations.

Contract formalities in annuity disputes

Pedrick v. Roten was a direct suit over a TIAA-CREF annuity, not an interpleader. The decedent tried to name a trust as beneficiary and the provider rejected the change. After trial, the court held that “the Decedent strictly complied with all of the requirements to change the beneficiary of the annuity contract to the Trust” (slip op. at 17), so the provider breached the contract. An unjust-enrichment claim against the prior designees failed.³

When the insurer is challenged

In Delaware Life v. Short, an annuity interpleader, the widow counterclaimed against the insurer for bad faith and breach of contract. The court refused to dismiss, stating that it could not conclude at the pleading stage “that Delaware Life is necessarily, as a matter of law, a legitimate stakeholder in a properly-brought interpleader action.”⁴ See discharge, fees, and interest.

Decisions

Related guides

• State law differences
• Slayer rule
• Annuities
• Change of beneficiary

Footnotes

1. 12 Del. C. § 2322(a)(3), (h)(1), (h)(3). Delaware Code Online. ↩ ↩² ↩³ ↩⁴

2. 12 Del. C. § 209. Delaware Code Online. ↩

3. Pedrick v. Roten, C.A. No. 11-1221-SRF, slip op. at 17 (D. Del. Sept. 29, 2014). GovInfo. ↩

4. Delaware Life Ins. Co. v. Short, C.A. No. 20-996-LPS, slip op. at 6 (D. Del. Mar. 17, 2021). GovInfo. ↩