Wyoming: Divorce and Life Insurance Beneficiaries in Federal Court

In Costello, the insurer paid a policy’s proceeds into the court’s registry and was dismissed. The insured’s adult children from a prior marriage claimed against his former wife, who was still the named primary beneficiary. Their property settlement, incorporated into the divorce decree, did not mention the policy. After his death, change of beneficiary forms that had not been completed or signed were found in his safety deposit box.

Judge Kerr ruled for the former wife. “The divorce had no effect, as such, on the right of the named beneficiary, the ex-wife, to claim the proceeds.”¹ On the settlement agreement: “The agreement did not specifically mention the insurance policies. Absent such a specific disclaimer, the Court will not imply such a renunciation.”¹ On the unsigned forms: “Mere intent to change a beneficiary is not enough.”²

Bushnell reached a different result on different facts. There, the property settlement expressly gave the insured his life insurance as his sole property, and the court held that the former wife had given up her expectancy. Costello relied on Bushnell for the principle that “The benefits derived from a designation as the beneficiary of a life insurance policy, are in the nature of a gift.”³

See divorce and beneficiary designations and West Virginia, another state where the settlement agreement decides these cases.

Related guides

• State law differences
• Change-of-beneficiary disputes

Footnotes

1. Costello v. Costello, 379 F. Supp. 630, 633 (D. Wyo. 1974). Justia. ↩ ↩²

2. Costello, 379 F. Supp. at 634. ↩

3. Costello, 379 F. Supp. at 632 (quoting Aetna Life Ins. Co. v. Bushnell, 190 F. Supp. 499, 502 (D. Wyo. 1960)). ↩