Maryland: Beneficiary Disputes and Interpleader Under Maryland Law

The District of Maryland decisions collected here do not announce a broad Maryland beneficiary rule. They apply two narrower points: Maryland’s presumption of sanity and capacity, which a challenger must overcome with evidence, and, when a designation could fit more than one person, the evidence of whom the insured meant.¹²

A former spouse named after the divorce

Revocation-on-divorce rules deal with a designation the insured forgot to change. Dorsey v. Ratz involved the opposite. The insured had named his two daughters as co-beneficiaries of a $500,000 policy. A few months after his divorce, he signed and sent a change form naming his former wife, to whom he had been married for 30 years, as sole beneficiary. After his death, the daughters challenged the change for forgery, lack of capacity and undue influence.¹

By summary judgment, they had dropped the forgery claim and offered “no admissible evidence and no expert testimony” for the other two. Medical records from a few months before the change described his thought process as “linear, logical, and goal directed.” The court held that counsel’s appeal to “life experience and common sense” and a daughter’s affidavit of her belief “are insufficient to overcome the presumption of sanity and capacity under Maryland law.” The former wife received the proceeds.¹

No fee shifting. She then asked for her attorney’s fees. In a diversity case the court applied Maryland law and denied the request. The daughters’ claims had been plausible when filed: “Simply because discovery does not produce evidence to support a case going forward does not mean a party acted wrongfully in bringing the lawsuit.” Nor did their conduct amount to “an abuse of the judicial process” under Maryland Rule 1-341.³ See undue influence and capacity and attorney’s fees in interpleader.

Three women named Mary Gallagher

In MetLife v. Chase, a county employee changed his group life beneficiary in 2016 to “Mary Gallagher.” Three relatives had used that name: his sister, his former wife and his adult daughter. The former wife’s 1999 settlement agreement had required him to keep $100,000 of life insurance with her as primary beneficiary, but it added: “If [the former wife] remarries, she shall be removed as the primary beneficiary.” She had remarried and changed her name before 2016, and so had the daughter.²

The insurer deposited about $31,933 and was discharged. The sister moved for summary judgment with her own affidavit and a brother’s, describing her close relationship with the insured and his wish “to do something for her.” No one opposed. The court found that “the evidence supports the view that the Decedent was referring to his sister … when he changed the beneficiary designation for the MetLife Policy to “Mary Gallagher.”” It awarded her the fund.² The paper designation form itself had not been produced.

Decisions

Elsewhere on this site

• Turner v. McCray-Bey (D. Md. 2023), on the burden of proof under Maryland’s slayer statute, is discussed in the slayer rule.
• Talcott Resolution v. Carlyle (D. Md. 2022), which limited an annuity issuer’s fees to interpleader work, is discussed in attorney’s fees in interpleader.

Related guides

• State law differences
• Divorce and beneficiary designations
• Undue influence and capacity
• Slayer rule
• Federal programs

Footnotes

1. Dorsey v. Ratz, No. CCB-12-1564, memorandum at 1–2 (D. Md. Apr. 29, 2013) (citing Lynn v. Magness, 191 Md. 674, 680–81 (1948)). GovInfo. ↩ ↩² ↩³

2. Metropolitan Life Ins. Co. v. Chase, No. 8:24-cv-00017-LKG, memorandum opinion at 1–8 (D. Md. Sept. 26, 2024). GovInfo. ↩ ↩² ↩³

3. Dorsey v. Ratz, No. CCB-12-1564, memorandum at 1–3 (D. Md. Oct. 10, 2013). GovInfo. ↩