Michigan: Beneficiary Disputes and Interpleader Under Michigan Law

A statute that makes the divorce judgment decide

Michigan does not leave revocation to a general probate rule. MCL 552.101 tells the divorce court to decide the question: “Each judgment of divorce or judgment of separate maintenance shall determine all rights of the wife in and to the proceeds of any policy or contract of life insurance, endowment, or annuity upon the life of the husband in which the wife was named or designated as beneficiary.” A parallel subsection covers the husband. If the judgment does not determine those rights, “the policy shall be payable to the estate of the husband or to the named beneficiary if the husband so designates.”¹

The judgments in both cases below carried an insurance clause extinguishing each party’s rights in the other’s policies “unless specifically preserved.” The statute requires a determination, not a particular result. As one court put it, “It does not require that the wife extinguish any rights she may have in such policies.”²

ERISA pays; Michigan decides who keeps it

The Michigan Supreme Court held in Sweebe v. Sweebe (2006) that a named beneficiary can waive her right to keep plan proceeds. The Sixth Circuit allows a constructive trust after the plan pays. Eastern District of Michigan judges combine the two. “The law in the Sixth Circuit is clear: the Plan administrator must pay the named beneficiary on an ERISA-regulated plan the plan benefits.”² As Judge Ludington explained, “Once the administrator processes the claim and disburses the benefits, however, the federal interest in administrative uniformity is achieved.” The waiver question then goes to Michigan law.³

A default divorce counts. In Flusty, the former wife had obtained a default divorce whose insurance clause extinguished her rights. She argued that Sweebe involved a consent judgment. Judge Duggan held that she “cannot now contend that she should not be bound by the language in the judgment of divorce, a judgment that she sought and obtained.” The estate and the insured’s children won the $37,500 in GM plan benefits after payment.²

So does separate maintenance. In Alexander, the insured died one month after a judgment of separate maintenance. His wife was still legally his wife, and she produced testimony from three people that he wanted her to remain beneficiary. The court held that under § 552.101, “judgments for divorce and judgments for separate maintenance are subject to precisely the same legal requirements and default rules.” Statements of intent did not substantially comply with the policy’s signed-writing requirement. “Although the Spouse is entitled to receive the funds, she is not entitled to retain them.”³

Decisions

Elsewhere on this site

• Fidelity Life Ass’n v. Amstutz (E.D. Mich. 2016), denying an insurer’s fees, is discussed in attorney’s fees in interpleader.
• Estate of Budinski v. AAA Life (E.D. Mich. 2026), a default judgment in an annuity interpleader.

Related guides

• State law differences
• Divorce and beneficiary designations
• ERISA post-distribution claims
• Federal programs
• Change of beneficiary

Footnotes

1. Mich. Comp. Laws § 552.101(1)–(2). Michigan Legislature. ↩

2. Metropolitan Life Ins. Co. v. Flusty, 545 F. Supp. 2d 624 (E.D. Mich. 2008), No. 07-12560, opinion at 3, 6, 8–10 (Jan. 3, 2008). GovInfo. ↩ ↩² ↩³

3. Union Security Ins. Co. v. Alexander, No. 1:11-cv-10858-TLL-CEB, opinion and order at 1–14 (E.D. Mich. Nov. 2, 2011) (citing Sweebe v. Sweebe, 712 N.W.2d 708 (Mich. 2006), and Central States, Se. & Sw. Areas Pension Fund v. Howell, 227 F.3d 672 (6th Cir. 2000)). GovInfo. ↩ ↩²