State law

Ohio: Beneficiary Disputes and Interpleader Under Ohio Law

In Ohio, a divorce treats a former spouse named as beneficiary as if they had died first, unless the designation or the decree says otherwise. A decree that orders new coverage for the children does not rewrite an old policy. Under Ohio's slayer law, a beneficiary can be barred without a conviction, but being a "person of interest" is not proof.

By Michael J. Hoover

Key points

Under R.C. 5815.33(B)(1), a former spouse named as beneficiary is "deemed to have predeceased" the insured after divorce, dissolution or annulment, unless the designation or the decree "specifically provides otherwise." Remarriage to each other restores the designation.
In Colonial Life v. Estate of Stewart (6th Cir. 2020), the former wife was cut out even though she had paid the premiums. A decree requiring new employer coverage for the children did not redirect an older individual policy.
Ohio's slayer statute applies on conviction, a guilty plea and certain other outcomes. Under Shrader, a claimant can also prove the killing in the civil case without a conviction.
In Prudential v. Blanton (N.D. Ohio 2015), an open investigation and a "person of interest" label were not evidence. The named beneficiary got summary judgment, and a stay was denied.

On this page

Divorce: “deemed to have predeceased”
The slayer rule: statute plus civil proof
Decisions
Elsewhere on this site
Related guides

Divorce: “deemed to have predeceased”

Ohio’s revocation statute is in the trust code, but it covers life insurance, annuities, payable-on-death accounts, IRAs, employer death benefit plans and other contract death benefits. If one spouse named the other and they later divorce, dissolve the marriage or obtain an annulment, “the other spouse shall be deemed to have predeceased the spouse who made the designation.” The exception applies only if “the designation of beneficiary or the judgment or decree granting the divorce, dissolution of marriage, or annulment specifically provides otherwise.” If the couple remarry each other, the designation is restored.¹

Because the former spouse is treated as having died first, the money goes to the contingent beneficiary. If there is none, the policy terms decide who takes, often the estate.

A decree that points elsewhere. In Colonial Life v. Estate of Stewart, the wife bought a $100,000 individual policy on her husband’s life through payroll deduction at her job and was named primary beneficiary. The contingent beneficiaries were listed only as “All Children.” Their 2006 decree required each spouse to keep the life insurance “provided through” their employment for the couple’s children until age 23, but it did not mention this policy. After the insured died in 2017, the Sixth Circuit affirmed that § 5815.33 removed the former wife. It also held that:²

The decree could not redirect the policy to the couple’s two children alone: “the divorce decree language is not enough to re-write the existing policy.” The policy predated the divorce and was not employer coverage.
She knew about the policy, since “the premiums were deducted from her paycheck,” and yet the couple “did not seek to revise the beneficiaries.”
A constructive trust requires clear and convincing evidence, and none was offered.
“All Children” meant all four of the insured’s biological children, including two from other relationships, and they shared equally. It did not matter that his will had left out one of them.

The court noted that a decree can still matter. “A sufficiently specific divorce decree can remove an ex-spouse as beneficiary under a life insurance policy,” and Ohio courts have imposed constructive trusts where a decree used “clear and intelligible language” about a specific policy.²

The slayer rule: statute plus civil proof

R.C. 2105.19(A) bars a person from benefiting from a death if they are convicted of, plead guilty to, or are found not guilty by reason of insanity of aggravated murder, murder, voluntary manslaughter or certain involuntary manslaughter offenses. The bar also covers some people found incompetent to stand trial and some juvenile adjudications. Barred proceeds pass as if the killer had predeceased the decedent.³

The Ohio Supreme Court held in Shrader v. Equitable Life (1985) that the statute is not the only route. As quoted in Blanton, “the identity of a person who intentionally and feloniously caused the death of another can be established in a civil proceeding in order to prevent the wrongdoer from receiving the proceeds of the deceased’s life insurance policy.”⁴

That route requires evidence. In Blanton, the insured’s brother opposed payment to her daughter, the named beneficiary, and relied on a detective’s affidavit calling her a “person of interest.” Judge Carr noted that “there could be many reasons why the authorities designate an individual a “person of interest.”” The affidavit gave no factual basis: “While such official designation may raise some suspicion, suspicion is not proof.” Summary judgment went to the beneficiary. The court refused to stay the case for a criminal process that had not produced charges in more than thirty months: “Under all the present circumstances keeping things in limbo makes little sense.”⁴ See the slayer rule.

Decisions

Colonial Life & Accident Ins. Co. v. Estate of Stewart (6th Cir. 2020)

No. 19-3724 (unpublished), on appeal from the S.D. Ohio
Judges Norris, Donald and Nalbandian (per curiam)
Decided June 23, 2020

Facts: A former wife who bought and paid for a policy on her husband's life remained the named primary beneficiary after their 2006 divorce. The contingent designation read "All Children."
Holding: R.C. 5815.33(B)(1) removed her, and no constructive trust was warranted. The proceeds were split among the insured's four biological children. Affirmed.
Why it matters: Paying the premiums does not defeat the statute. A decree has to speak specifically to the policy to change who takes it.

Opinion: GovInfo.

Prudential Ins. Co. of America v. Blanton (N.D. Ohio 2015)

No. 3:14-cv-02343-JGC, Doc. 22; 118 F. Supp. 3d 980
Senior Judge James G. Carr
Decided Aug. 7, 2015

Facts: About $59,000 in life insurance and annuity proceeds was payable to the insured's daughter. The insured's brother claimed the daughter was responsible for the death, citing her status as a person of interest in an open investigation.
Holding: With no conviction and no evidence from which a jury could find she intentionally and feloniously caused the death, the daughter was entitled to summary judgment and release of the funds. The request for a stay was denied.
Why it matters: A slayer challenge without a conviction must be supported by evidence, not just an investigation's label.

Opinion: GovInfo.

Elsewhere on this site

Unum Life v. DeBoard (S.D. Ohio 2021), denying an insurer’s fees, is discussed in attorney’s fees in interpleader.
Prudential v. West (N.D. Ohio), from filing to final judgment, appears in the timeline table in how long an interpleader takes.

Ohio Rev. Code § 5815.33(A)–(B). Ohio Laws. ↩
Colonial Life & Accident Ins. Co. v. Estate of Stewart, No. 19-3724, slip op. at 1–8 (6th Cir. June 23, 2020) (per curiam) (unpublished) (citing Grzely v. Singer, 971 N.E.2d 481 (Ohio Ct. App. 2012), and Kelly v. Medical Life Ins. Co., 509 N.E.2d 411 (Ohio 1987)). GovInfo. ↩ ↩²
Ohio Rev. Code § 2105.19(A)–(B). Ohio Laws. ↩
Prudential Ins. Co. of America v. Blanton, No. 3:14-cv-02343-JGC, order at 1–9 (N.D. Ohio Aug. 7, 2015), Doc. 22 (quoting Shrader v. Equitable Life Assur. Soc., 20 Ohio St. 3d 41, 48 (1985)). GovInfo. ↩ ↩²