interpleader.com
Guides

Basics

What can be interpleaded

If you are involved

Beneficiary disputes

Law and sources

Talk to an attorney

State law

Massachusetts: Beneficiary Disputes and Interpleader Under Massachusetts Law

Once a Massachusetts divorce is filed, an automatic restraining order freezes life insurance beneficiaries. Federal judges in Boston have undone changes made in violation of it, even when the insured died before the divorce was final. A dispute that turns on a divorce decree may not belong in federal court at all.

By

On this page
  1. The automatic restraining order
  2. After the divorce: § 2-804
  3. When federal court is the wrong forum
  4. Decisions
  5. Elsewhere on this site
  6. Related guides

The automatic restraining order

When a Massachusetts divorce is filed, Supplemental Rule 411 of the Probate and Family Court restrains both spouses. As quoted in a 2020 decision: “Neither party shall directly or indirectly change the beneficiary of any life insurance policy . . . except with the written consent of the other party or by order of the court.”1 The order warns that a violation may be treated as contempt.

The question in federal interpleaders has been what happens when an insured violates the order and then dies before the divorce ends. Two District of Massachusetts decisions answer it the same way.

Mabardy (2023). The insured filed for divorce in August 2018. Weeks later, with the restraining order in place, he changed the beneficiary of his whole-life policy from his wife to his father. The policy later lapsed into about $97,000 of extended-term coverage, and he died in 2022 with the divorce still pending. The father argued that contempt in the divorce case was the only remedy and that the case had died with his son. Chief Judge Saylor disagreed, following earlier District of Massachusetts decisions:2

  • Without consent or a court order, the change violated the order: “Thus, his actions were unlawful.”
  • Quoting an earlier decision: “Decedent should not be allowed to accomplish an unlawful modification of assets by dying before the entry of a final judgment.”
  • The earlier cases involved ERISA plans, but that did not change the result.
  • Her status as both a divorcing party and a surviving spouse did not matter: “She was, in fact, a surviving spouse, as the divorce was not final; however, that fact is immaterial.”

“Because that attempted violation was unlawful and unenforceable, the Court will not give it legal effect.” The wife took the proceeds.2

Leonelli-Elmer (2020). Here the insured had asked the probate court to lift the order, but he died before it ruled. In the hours before his death, a son acting under a new power of attorney filled out a form naming the insured’s three sons. The court did not decide whether the power of attorney allowed that. Under Rule 411, “until his death, David could not change the beneficiary to his life insurance policy,” and summary judgment went to the widow.1

After the divorce: § 2-804

Massachusetts adopted the Uniform Probate Code’s revocation rule in G.L. c. 190B, § 2-804. Divorce revokes a revocable disposition to a former spouse “Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate.” The statute specifies that “A judgment of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section.”3 During a pending divorce, then, the restraining order protects the spouse’s designation. After a final divorce, § 2-804 generally revokes it.

When federal court is the wrong forum

SBLI v. Fleming shows a limit. The insured’s 1986 separation agreement, apparently incorporated into the divorce judgment, required him to keep his children as beneficiaries. He later named his second wife. The court first accepted the interpleader deposit, then dismissed the case on its own motion: “This is not, therefore, a simple contract dispute. It is a dispute over the proper distribution of marital property subsequent to a divorce decree.” The domestic-relations exception applies to statutory interpleader under 28 U.S.C. § 1335: “there is no reason to think that Congress intended § 1335 to operate any differently.” The court returned the deposit to the insurer and noted that Massachusetts Rule 22 allows interpleader in state court.4

Mabardy and Leonelli-Elmer did not discuss the exception and were decided on the merits. They involved an order in a pending case, not the construction of a final decree. See statutory vs. Rule 22 interpleader.

Decisions

New York Life Ins. Co. v. Mabardy (D. Mass. 2023)

  • No. 22-11126-FDS
  • Chief Judge F. Dennis Saylor IV
  • Decided June 27, 2023
Facts
While his divorce was pending and the automatic restraining order was in effect, the insured changed the beneficiary from his wife to his father. He died before the divorce was final.
Holding
The change was unlawful and given no effect. Summary judgment for the wife.
Why it matters
A change made in violation of the restraining order does not become effective because the insured dies before judgment.

Opinion: GovInfo.

Genworth Life & Annuity Ins. Co. v. Leonelli-Elmer (D. Mass. 2020)

  • No. 19-CV-10083-RWZ; 478 F. Supp. 3d 103
  • Judge Rya W. Zobel
  • Decided Aug. 12, 2020
Facts
The insured died with his divorce pending and a motion for relief from the restraining order undecided. A son, acting under a power of attorney signed the day before, designated the insured's sons as beneficiaries.
Holding
Rule 411 barred any change without consent or court order. Summary judgment for the widow; the sons' cross-claims were dismissed as moot.
Why it matters
A pending request to lift the order is not permission, and an agent under a power of attorney cannot do what the insured himself was barred from doing.

Opinion: GovInfo.

Savings Bank Life Ins. Co. of Massachusetts v. Fleming (D. Mass. 2016)

  • No. 16-10535-FDS
  • Judge F. Dennis Saylor IV
  • Decided Dec. 9, 2016
Facts
The insured's children from his first marriage relied on a 1986 separation agreement. His second wife relied on his later designation. All claimants were unrepresented.
Holding
The domestic-relations exception applies to statutory interpleader. The case was dismissed for lack of subject-matter jurisdiction, and the deposit was returned to the insurer.
Why it matters
When the outcome depends on interpreting a state divorce decree, a federal court may decline to hear the interpleader, even after accepting the deposit.

Opinion: GovInfo.

Elsewhere on this site

  • Minnesota Life v. Key-Nesmith (D. Mass. 2021), in which a funeral-funding company was paid its assignment and dismissed early, is discussed in named in an interpleader.

Footnotes

  1. Genworth Life & Annuity Ins. Co. v. Leonelli-Elmer, 478 F. Supp. 3d 103 (D. Mass. 2020), No. 19-CV-10083-RWZ, memorandum and order at 2–4 (Aug. 12, 2020) (quoting Supp. R. Prob. & Fam. Ct. 411(a)(3)). GovInfo. ↩ ↩2

  2. New York Life Ins. Co. v. Mabardy, No. 22-11126-FDS, memorandum and order at 2–6 (D. Mass. June 27, 2023) (quoting Unicare Life & Health Ins. Co. v. Phanor, 472 F. Supp. 2d 8, 15 (D. Mass. 2007)). GovInfo. ↩ ↩2

  3. Mass. Gen. Laws ch. 190B, § 2-804(a)(2), (b). Massachusetts Legislature. ↩

  4. Savings Bank Life Ins. Co. of Massachusetts v. Fleming, No. 16-10535-FDS, memorandum and order at 1–8 (D. Mass. Dec. 9, 2016). GovInfo. ↩