Tennessee: Beneficiary Disputes and Interpleader Under Tennessee Law

The MDA is the starting point

In many Tennessee divorce cases, the dispute is about what the marital dissolution agreement (MDA) or parenting plan required, not whether a statute removed the former spouse. The Tennessee Supreme Court’s rule, as quoted in Edenfield, is that “an enforceable agreement, such as a marital dissolution agreement, which mandates that an individual be listed as a beneficiary of a life insurance policy existing at the time of the agreement vests in that individual an equitable interest in the designated policy.” If the insured breaches that duty, the intended beneficiary has “a vested right to any life insurance policy obtained by the Decedent that satisfies the mandate in the decree.”¹

The interest only reaches as far as the agreement’s words. Both decisions below limited the claimant to what the MDA or parenting plan actually required.

ERISA pays; Tennessee decides the constructive trust

In Willis, the employer plan was governed by ERISA. The court did not have to decide whether the MDA was a qualified domestic relations order. It relied on Sixth Circuit authority allowing a constructive trust under state law once benefits are released to the proper beneficiary. Because the insurer had paid the $183,000 in basic and supplemental benefits into the court, Tennessee law decided whether a trust should be imposed. See federal programs and ERISA claims after payment.²

The 2012 MDA said the former wife “shall remain as the beneficiary of this policy for as long as he has this policy.” She argued that this gave her everything. When the MDA was signed, however, she was already designated for 50%, alongside the insured’s mother and two sons. Two later change forms kept her at 50%. The court reached three conclusions:²

• Ambiguity. “The mere fact that the MDA refers to Ms. Willis as “the beneficiary” does not necessarily exclude the existence of other beneficiaries.”
• Construed against the drafter. Her attorney had drafted the MDA, and the insured was unrepresented, so the ambiguity was read against her.
• No trust. There was “not clear and convincing evidence to support the Court applying the extraordinary remedy of a constructive trust.” Summary judgment went to the other designated beneficiaries.

Coverage amount versus a particular policy

Edenfield shows the other limit. The parenting plan required the insured to “insure his own life in the minimum amount of $250,000” while any child was a minor. He already had a $250,000 policy naming the child, and the guardian collected it. The child’s side then claimed $250,000 more from two $500,000 policies that named someone else. The court held: “The Permanent Parenting Plan did not require Mr. Edenfield to hold a particular life insurance policy. Rather, it required him to hold a particular amount of coverage—at least $250,000—during the minority of any child.” The child was “not entitled to more.”¹

Slayer rule: conviction is conclusive, even for ERISA benefits

Tennessee’s slayer statute, Tenn. Code Ann. § 31-1-106, bars a killer from taking property because of the victim’s death, and it provides that “[a] judgment of conviction establishing criminal accountability for the felonious and intentional killing of the decedent is conclusive evidence that the individual is the decedent’s killer for purposes of this section,” as quoted by the federal court in Guy.³ In that case a son was convicted of murdering both parents, who were covered under employer group life and accidental death plans governed by ERISA. The Eastern District of Tennessee would not wait for his criminal appeal: “nothing in Tennessee’s slayer statute indicates that a judgment of conviction must be final to be conclusive evidence in a civil matter concerning the proper disposition of life insurance benefits.”⁴ It then held him disqualified under the statute or, alternatively, federal common law.³

The Sixth Circuit affirmed in a published opinion. ERISA’s rule that the administrator pays the designated beneficiary “is not absolute,” and the court found the slayer scenario closer to undue influence and fraud than to the divorce waiver in Kennedy. It “need not definitively resolve the preemption issue left open in Egelhoff,” because “[a]ssuming that ERISA preempts Tennessee’s slayer statute, the federal common-law slayer rule controls in this case.”⁵ So in Tennessee, a beneficiary who murders the insured loses whether the coverage is an individual policy governed by state law or an ERISA plan. See the slayer rule.

Decisions

Elsewhere on this site

• Everlake v. Lomax (M.D. Tenn. 2025): a forged change form held void. See also change of beneficiary.
• Wilty v. Prudential (W.D. Tenn.), on freezing ERISA proceeds already paid, and Sun Life v. Estate of Jordi (M.D. Tenn. 2020), on the absence of a jury in an ERISA interpleader, are both discussed in ERISA claims after payment.

Related guides

• State law differences
• Divorce and beneficiary designations
• Minor beneficiaries
• Federal programs
• Slayer rule

Footnotes

1. Ohio National Life Assurance Corp. v. Edenfield, No. 3:12-cv-257-TAV-CCS, mem. op. at 2–8 (E.D. Tenn. May 20, 2015), Doc. 37 (quoting Holt v. Holt, 995 S.W.2d 68, 72, 77 (Tenn. 1999)). GovInfo. ↩ ↩²

2. Unum Life Ins. Co. of America v. Willis, No. 1:19-cv-02719-STA-jay, order at 1–11 (W.D. Tenn. Jan. 13, 2021), ECF No. 75 (quoting Cent. States, S.E. & S.W. Areas Pension Fund v. Howell, 227 F.3d 672, 679 (6th Cir. 2000)). GovInfo. ↩ ↩²

3. Standard Ins. Co. v. Guy, No. 2:18-cv-00074, mem. op. and order at 4–6 (E.D. Tenn. May 20, 2021), ECF No. 120 (quoting Tenn. Code Ann. § 31-1-106(g)). Court copy (PDF). ↩ ↩²

4. Guy, No. 2:18-cv-00074, order at 2 (E.D. Tenn. Dec. 1, 2020), ECF No. 70. ↩

5. Standard Ins. Co. v. Guy, 115 F.4th 518 (6th Cir. 2024), slip op. at 5, 9–12. Court copy (PDF). ↩