Minnesota: Beneficiary Disputes and Interpleader Under Minnesota Law

The statute the Supreme Court upheld

Minnesota’s revocation-on-divorce statute, Minn. Stat. § 524.2-804, reached national significance in Sveen v. Melin.¹ The facts were simple. The insured named his then-wife as primary beneficiary in 1998 and his children as contingent beneficiaries. As the Eighth Circuit later summarized, “In 2002, Minnesota extended its revocation-upon-divorce statute to life insurance policies.” The couple divorced in 2007, and he died in 2011 without changing the designation.²

The insurer interpleaded. The former wife argued that applying the 2002 amendment to a 1998 designation impaired her contract rights. The Eighth Circuit initially agreed in a 2017 opinion, but the Supreme Court reversed, “holding that retroactive application of Minnesota’s revocation-upon-divorce statute did not violate the Contracts Clause.”² On remand: “In light of the Supreme Court’s decision in Sveen, this court affirms the district court’s grant of summary judgment awarding the policy proceeds to the children.”²

For Minnesota claimants, the practical point is that the date the designation was made usually does not save a former spouse’s claim. Compare Nebraska, where a federal court found its statute was not meant to apply retroactively, and Montana, where the Ninth Circuit certified a similar timing question to the state supreme court.

Slayer rule

Minn. Stat. § 524.2-803 is Minnesota’s homicide section.³ The federal decisions collected here did not apply it, so this page does not describe its terms; see the slayer rule guide.

Capacity, electronic changes, and choice of law

Bultman involved a policy bought in Minnesota by an insured who later moved to Florida. His long-time partner was the original beneficiary. In the weeks before his death, while seriously ill, two electronic change forms named his sons instead. The partner argued lack of capacity and undue influence and asked the court to apply Florida law.

The court held that because the policy contract was formed in Minnesota, “Therefore, Minnesota law governs the policy, not Florida law.”⁴ It noted that “Both Minnesota and Florida recognize a presumption of competence.”⁵ It rejected the challenges and awarded the $250,000 in proceeds to the sons. See undue influence and capacity.

Fees: starting the case, not litigating it

The court discharged the insurer and allowed fees, but only for one phase. “Because Banner validly initiated the interpleader, its fees for that portion of the case will be awarded.”⁶ It awarded $9,862.58 from the fund, the fees and costs attributable to filing the interpleader (slip op. at 21), and declined to award fees for later discovery disputes and dispositive motions. See attorney’s fees in interpleader.

Decisions

Related guides

• State law differences
• Divorce and beneficiary designations
• Key decisions
• Attorney’s fees in interpleader

Footnotes

1. Minn. Stat. § 524.2-804. Minnesota Revisor of Statutes. ↩

2. Metropolitan Life Ins. Co. v. Melin, No. 16-1172, slip op. at 2 (8th Cir. Aug. 15, 2018) (per curiam). GovInfo. ↩ ↩² ↩³

3. Minn. Stat. § 524.2-803. Minnesota Revisor of Statutes. ↩

4. Banner Life Ins. Co. v. Bultman, Civ. No. 22-605 (JWB/DLM), slip op. at 15 (D. Minn. Jan. 8, 2024). GovInfo. ↩

5. Bultman, slip op. at 26. ↩

6. Bultman, slip op. at 14. ↩