State law
Oregon: Beneficiary Disputes and Interpleader Under Oregon Law
In Oregon, a divorce judgment can revoke a beneficiary designation, but the language of the judgment does the work. Courts also look past paperwork to intent, so a change of beneficiary can succeed even when the form never reaches the insurer.
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The judgment, not the divorce, revokes
Oregon’s dissolution statutes do not use the automatic-revocation model found in many states. Instead, ORS 107.121(1) provides that “[a] judgment of dissolution, separation or annulment may revoke a designation of beneficiary made by a principal in favor of a spouse or a relative of the spouse” if the principal could still change the designation. The revocation “becomes effective upon entry of the judgment,” and the revoked designation is given effect “as if the spouse or the relative of the spouse had predeceased the principal.”1
Two practical points follow:
- Read the judgment. The case usually turns on what the dissolution judgment actually says.
- Notice to the payor. An insurer is not liable for paying the named beneficiary in good faith “unless the person has received written notice of the revocation.” After notice, it may pay the money into the probate court or, if no probate has been opened, into the circuit court for the county where the decedent lived.1
The statute covers judgments entered on or after Jan. 1, 2006. For older judgments, Oregon courts enforced decree language directly. In Lacheln, the court explained that “[u]nder Oregon law, it is the degree of specificity of the relevant terms that determines whether a named beneficiary can recover under an insurance policy after entry of a divorce judgment,” and that “[t]hat same specificity of language controls the extent of recovery as well.”2
Revoked, then partly restored for support
In Lacheln, the insured’s 1997 term policy for $250,000 still named his former wife when he died in 2011. Their 2005 stipulated judgment said any earlier designation of the former spouse on life insurance “is deemed to have been revoked.” It also required her to disclaim. A separate paragraph required the husband, “[a]s additional spousal support,” to keep insurance naming her for at least the unpaid support.
Read together, those paragraphs revoked her designation and then restored it only up to the support still owed. The estate received the balance. The court treated declarations reporting that the insured meant to keep her as full beneficiary as immaterial, because he never took any step after the judgment to make that change.2
Intent can beat the paperwork
Oregon also does not demand strict compliance with an insurer’s change-of-beneficiary procedure. Folken quoted the Oregon Court of Appeals: “The overriding question is whether the decedent intended to accomplish such a change.”3
A widow who had inherited an annuity as beneficiary told her accountant that she wanted her stepdaughter to take it next. While hospitalized, she filled out the insurer’s form naming the stepdaughter and gave it to a friend to deliver to the accountant. She died before it was submitted, and the insurer at first denied the stepdaughter’s claim “because Voya did not receive the beneficiary designation form while Doreen was still alive.” Her mother, as heir, claimed the money. Judge Hernandez granted summary judgment to the stepdaughter for these reasons:3
- The accountant’s uncontradicted account and the completed form showed the widow’s intent.
- Checking “contingent” instead of “primary” was an evident error.
- “There is no requirement that a beneficiary be a well-liked family member.”
- On the date of death, the court said: “What is controlling is Doreen’s intent.”
See change of beneficiary for how other states handle incomplete changes.
Decisions
Midland National Life Ins. Co. v. Lacheln (D. Or. 2012), adopted 2013
- Facts
- A former wife was the named beneficiary of a $250,000 policy bought during the marriage. The 2005 dissolution judgment revoked prior designations but required insurance as security for spousal support. The estate was the default beneficiary.
- Holding
- The judgment itself revoked the designation; ORS 107.121 did not apply to a 2005 judgment. She was entitled to the support remaining at death, and the estate to the balance, with interest shared pro rata.
- Why it matters
- Decree language can split a policy between a former spouse and the estate. The insured's reported statements did not change the result.
Opinions: findings and recommendation; order adopting (GovInfo).
Folken v. Voya Insurance & Annuity Co. (D. Or. 2016)
- Facts
- The insurer deposited the annuity balance and was dismissed. The stepdaughter named on an unsubmitted form and the widow's mother, as heir, cross-moved for summary judgment.
- Holding
- "The evidence establishes as a matter of law that Doreen intended Folken to be the beneficiary of the annuity." Summary judgment went to the stepdaughter.
- Why it matters
- In Oregon, a completed but undelivered form, backed by a neutral witness, can be enough.
Opinion: GovInfo.
Elsewhere on this site
- Nationwide Life & Annuity v. Dunshie (D. Or. 2023), on objections to a stakeholder’s discharge, is discussed in named in an interpleader.
Related guides
Footnotes
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Or. Rev. Stat. §§ 107.121, 107.124, 107.127. Oregon Legislature. ↩ ↩2
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Midland National Life Ins. Co. v. Lacheln, No. 3:11-cv-00957-JE (D. Or.), findings and recommendation, Doc. 55 (Oct. 3, 2012), GovInfo, adopted, Doc. 79 (Jan. 11, 2013), GovInfo. ↩ ↩2
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Folken v. Voya Ins. & Annuity Co., No. 3:15-cv-01796-HZ, op. at 3–15 (D. Or. Aug. 23, 2016), Doc. 46 (quoting Sackos v. Great-West Life Assur. Co., 213 Or. App. 298, 305 (2007)). GovInfo. ↩ ↩2