State law

South Dakota: Beneficiary Disputes and Interpleader Under South Dakota Law

South Dakota follows the Uniform Probate Code on slayers and divorce. Its federal court has applied the slayer statute to guilty pleas short of murder, and a recommended ruling would let an oral premium agreement keep a former spouse on the policy.

By Michael J. Hoover

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Three questions South Dakota courts have answered
Decisions
Related guides

Three questions South Dakota courts have answered

Does a guilty plea to a lesser offense trigger the slayer statute?

It did in Torrence. Section 29A-2-803(b) applies to “An individual who feloniously and intentionally kills the decedent,” and subsection (c) revokes revocable dispositions to “the killer” in a governing instrument.¹ The husband-beneficiary had pleaded guilty to aggravated assault charges connected with his wife’s death, not to murder. Chief Judge Lange held: “Nonetheless, after reviewing the history and purpose of the slayer rule and authority from other states, this Court determines that SDCL § 29A-2-803 extinguishes Dean’s interest in the death benefit based on the undisputed facts in this case.”² The decedent’s adult children took the benefit, and the insurer was awarded fees and costs. See the slayer rule.

Can an oral promise keep a former spouse on the policy?

Section 29A-2-804(b) revokes a designation of a former spouse “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 made between the divorced individuals before or after the marriage, divorce, or annulment”.³ In Jenson, the former wife kept paying the premiums on the insured’s policy after the divorce, with his knowledge and consent, and he told an agent he wanted her to remain the beneficiary. Magistrate Judge Duffy wrote: “Here, the court holds that an oral contract can meet the requirements of the contract exception to SDCL § 29A-2-804(b).”⁴ That language appears in a report and recommendation, which recommended summary judgment for the former wife. Whether the district judge adopted it has not been confirmed for this page, so treat it as a recommendation. See divorce and beneficiary designations.

Is a letter enough to change the beneficiary?

Not in Venegas Gonzales. The claimant relied on a letter, said to have been written five months before the insured’s death, that reached the insurer only after the death and was not on the insurer’s change form. Judge Piersol held: “The facts, even viewed in the light most favorable to Defendant Ana Yepez Freire, do not support her position that she is the primary beneficiary of Jorge’s policy.”⁵ See change-of-beneficiary disputes.

Decisions

New York Life Ins. Co. v. Torrence (D.S.D. 2022)

No. 4:21-CV-04079-RAL, Doc. 47
Chief Judge Roberto A. Lange
Decided Mar. 22, 2022

Facts: The named beneficiary pleaded guilty to assault offenses connected with the insured's death.
Holding: The beneficiary's interest was extinguished; summary judgment for the decedent's children (slip op. at 8).
Why it matters: The statute is not limited to murder convictions.

Opinion: GovInfo.

American General Life Ins. Co. v. Jenson (D.S.D. 2012)

CIV. 11-5057-JLV, Doc. 33 (report and recommendation)
Magistrate Judge Veronica L. Duffy
Filed Mar. 12, 2012; adoption not confirmed

Facts: A former wife paid premiums under an oral agreement that she would remain the beneficiary.
Recommendation: An oral contract can satisfy the contract exception; summary judgment for her recommended (slip op. at 44).
Why it matters: The exception may reach agreements outside the divorce papers.

Report and recommendation: GovInfo.

Midland National Life Ins. Co. v. Venegas Gonzales (D.S.D. 2010)

CIV 09-4053, Doc. 78
Judge Lawrence L. Piersol
Decided June 23, 2010

Facts: A letter naming a new beneficiary surfaced after death and was not on the insurer's form.
Holding: Partial summary judgment against the letter's claimant (slip op. at 3).
Why it matters: Informal writings rarely displace a designation.