Nevada: Beneficiary Disputes and Interpleader Under Nevada Law

Retroactive by design

As both decisions below recount, the old Nevada rule was that “the rights of the beneficiary in an ordinary life insurance policy [were] not affected by subsequent divorce.” The legislature reversed that in 2011 with NRS 111.781. Unless otherwise provided “by the express terms of a governing instrument, a court order or a contract relating to the division of the marital estate,” a divorce revokes a revocable disposition to the former spouse. A decree of separation that does not end the marriage is not a divorce for this purpose.¹

The 2015 amendment added the clause that makes Nevada unusual: the statute “applies only to nonprobate transfers which become effective because of the death of a person on or after October 1, 2011, regardless of when the divorce or annulment occurred.”¹

In Ruckman, the couple divorced in January 2010, and the decree said nothing about the $200,000 policy. The former wife argued that the statute did not apply because it was enacted after her divorce. The insured’s daughter filed an affidavit saying he wanted her to have the money. The court held that the statute “applies retroactively to revoke [her] status as beneficiary under the life insurance policy. This is so regardless of when the underlying divorce took place.” With no other beneficiary named, the deposit of $212,959.93 went to the estate.²

Restoring a former spouse after the divorce

Revocation is not permanent. In Aguilar, the insured divorced in October 2017. In December he wrote to the insurer to “delete the entire Spouse Rider” covering his former wife, while asking to “keep all my other policy details (term, plan type, classification, rating) the same.” He died the next year. His former wife said that letter kept her as beneficiary, and his estate said it did not.³

Judge Dorsey’s analysis had three steps:

1. The divorce revoked the designation. A reissued policy with the same number and terms was a continuation, not a new policy, so the revocation carried through.
2. The letter was not a “governing instrument.” Under the statute, a governing instrument must be “executed by a divorced person before the divorce or annulment of the person’s marriage to the person’s former spouse.” A letter sent after the divorce does not qualify.¹
3. The letter could still change the policy, but its meaning was unclear. The letter was signed and accepted by the insurer, so it substantially complied with the policy’s change procedure. But “a request to remove a spouse rider and permit conversion to an independent policy does not meaningfully affect a beneficiary designation.” Whether “keep all my other policy details” meant restoring the former wife was a disputed question of intent.

Both summary judgment motions were denied, and the case was referred for a settlement conference.³

What the insurer recovers

Nevada federal courts award interpleader fees in their discretion, and the local rules require detailed support. In Ruckman, the insurer sought about $25,000 with an affidavit listing hours and rates. The court denied the request entirely because it did not address the Local Rule 54-14 factors: “Without more, the court is unable to determine an appropriate award of fees and costs.” In Aguilar, the unopposed request was trimmed for costs the local rules disallow, and $11,294.12 was awarded.²³ See attorney’s fees in interpleader.

Decisions

Elsewhere on this site

• Thrivent v. Bloomquist (D. Nev. 2018), a default judgment involving a California divorce and a choice-of-law question.

Related guides

• State law differences
• Divorce and beneficiary designations
• Change of beneficiary
• Attorney’s fees in interpleader
• Federal programs

Footnotes

1. Nev. Rev. Stat. § 111.781(1), (10), (11)(b), (11)(d). Nevada Legislature. ↩ ↩² ↩³

2. Genworth Life & Annuity Ins. Co. v. Ruckman, No. 2:18-cv-1470-JCM-VCF, order at 1–2, 7–10 (D. Nev. Nov. 22, 2019), ECF No. 66 (quoting Redd v. Brooke, 604 P.2d 360, 361 (Nev. 1980)). Court filing (PDF). ↩ ↩²

3. Primerica Life Ins. Co. v. Aguilar, No. 2:20-cv-00121-JAD-BNW, order denying cross-motions for summary judgment and granting plaintiff’s motion for attorneys’ fees at 3, 8–16 (D. Nev. June 9, 2021), ECF No. 57. Court filing (PDF). ↩ ↩² ↩³