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New Mexico: Beneficiary Disputes and Interpleader Under New Mexico Law

New Mexico's revocation-on-divorce statute reaches further than most. It covers a divorce case that ends after the insured's death with an order dividing all marital property. A federal court has read it as a rebuttable presumption, but a former spouse's own account of what the insured told her was not enough to rebut it.

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On this page
  1. What counts as a divorce
  2. A presumption the former spouse can rebut
  3. Notice and the probate court
  4. Decision
  5. Elsewhere on this site
  6. Related guides

What counts as a divorce

New Mexico follows the Uniform Probate Code’s revocation rule in § 45-2-804, with an addition from 2011. “Divorce or annulment” includes the usual final decree and also “the commencement of a valid proceeding concluded either before or after an individual’s death by an order purporting to terminate all marital property rights, including a property division judgment entered pursuant to the provisions of Section 40-4-20 NMSA 1978.” The statute adds that “A decree of separation that does not terminate the status of spouse is not a divorce for purposes of this section.”1

Under the standard Uniform Probate Code definition, a divorce still pending when the insured dies revokes nothing. Under New Mexico’s definition, a case that ends after the death with an order terminating all marital property rights can still trigger revocation. Whether a particular order meets that test depends on its terms.

Revocation applies “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 governing instrument must be one “executed by the divorced individual before the divorce or annulment.”1

A presumption the former spouse can rebut

The statute does not say whether a former spouse can show that the insured meant to keep her as beneficiary anyway. In Guerrero, Judge Herrera predicted that New Mexico would allow it. The statute “creates a presumption that divorce revokes the designation of one’s spouse as the beneficiary of an insurance policy, but that presumption can be rebutted if the former spouse meets his or her burden to do so by a preponderance of the evidence.”2

The 2003 divorce decree did not mention the $125,000 policy. The former wife offered three kinds of evidence:

  • A signed conversion form. In 2008 the insured signed her application to split a joint arrangement into separate policies. The court found nothing in that form about his beneficiary: “Thus, Decedent’s signature authorizing the split is not sufficient to act as a written re-designation of beneficiary.”
  • Inaction. He declined the agent’s offer of change forms. The court agreed that “if mere inaction by the Decedent could demonstrate intent, the entire purpose of the statute would be eviscerated.”
  • His statements to her. She swore he told her he wanted her to remain beneficiary, but the agent testified that the insured never told him so. The court adopted the rule that “self-serving statements made by the decedent only to the beneficiary and not witnessed by any other person are insufficient.”

That she had paid the premiums for years did not change the result. Because the former wife had not rebutted the presumption of revocation, the court granted the motion for summary judgment filed by the personal representative of the insured’s estate and entered judgment in the estate’s favor.2

Notice and the probate court

Subsection G sets the insurer’s position. A payor is protected for payments made in good faith before it receives written notice of the divorce, but is “liable for a payment made or other action taken after the payor or other third party received written notice of a claimed forfeiture or revocation.” Notice goes by registered or certified mail or by service like a summons. After notice, the payor may deposit the money with the court handling the probate proceedings, or with the probate court in the county of the decedent’s residence. That deposit discharges it.1 The insurer in Guerrero used federal interpleader instead. See state court interpleader.

Decision

Lincoln Benefit Life Co. v. Guerrero (D.N.M. 2016)

  • No. 14-1077 JCH/WPL (Docs. 49, 50)
  • Judge Judith C. Herrera
  • Decided June 27, 2016
Facts
The insured never changed his former wife's designation after their 2003 divorce. Her mother, the contingent beneficiary, disclaimed. The former wife relied on a 2008 policy-split form, his inaction and his statements to her.
Holding
Section 45-2-804 creates a rebuttable presumption of revocation, and the former wife's evidence did not rebut it. The court granted summary judgment to the estate's personal representative, who had moved for it, in favor of the estate. In a companion order, the insurer was allowed to deposit $125,000, but its requested injunction was narrowed to claims to the policy proceeds.
Why it matters
A former spouse can try to show the insured meant to keep her. A form that does not address the beneficiary, silence, or uncorroborated private statements will not do it.

Opinions: summary judgment (GovInfo); interpleader order (GovInfo).

Elsewhere on this site

  • Fidelity & Guaranty Life v. Shipman (D.N.M. 2024), in which a change form that the surviving spouse said was mailed never reached the insurer, is discussed in change of beneficiary.

Footnotes

  1. N.M. Stat. Ann. § 45-2-804(A)(2), (A)(4), (B), (G) (2025). NMOneSource (NMSA 1978, ch. 45). ↩ ↩2 ↩3

  2. Lincoln Benefit Life Co. v. Guerrero, No. 14-1077 JCH/WPL, memorandum opinion and order at 1, 12–15 (D.N.M. June 27, 2016), Doc. 50 (quoting American General Life Ins. Co. v. Jenson, 2012 WL 848158, at *15 (D.S.D. Mar. 12, 2012), and citing Buchholz v. Storsve, 740 N.W.2d 107, 112 (S.D. 2007)). GovInfo. ↩ ↩2