Massachusetts court decides that parents instead of spouse receive life insurance benefits
In Forcier v. Forcier, a federal district court in Massachusetts decided the proper beneficiary of an ERISA life insurance policy. The dispute was over the proceeds of a life insurance policy, governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. The deceased, Darren Forcier, was covered by a group term life insurance policy issued by Metropolitan Life Insurance Company (MetLife) as part of his employment benefits. However, he did not name a beneficiary for the policy, so MetLife's policy dictates that the In Forcier v. Forcier, a federal district court in Massachusetts decided the proper beneficiary of an ERISA life insurance policy. benefits will be paid to the surviving spouse, child, parent, brother or sister, or to the estate if no named beneficiary is available.
Darren was married to Doris Forcier but the marriage was short-lived, and Doris filed for divorce less than two years later. They entered into a separation agreement in July 2003, which included a final financial separation. However, the divorce was not yet final when Darren committed suicide fifteen days after the divorce nisi was granted, leaving Doris as his surviving spouse.
Both Doris and Lorraine Forcier, Darren's mother and administrator of his estate, claimed the right to the proceeds of the life insurance policy. MetLife did not make a decision regarding the benefits and filed an interpleader action, asking the court to decide who should receive the proceeds. After conducting a bench trial, the court determined that the policy creates a permissive hierarchy of beneficiaries, with the surviving spouse being the preferred beneficiary absent extraordinary circumstances. Although Doris was the lawful spouse, the court ordered that the benefits be paid in equal portions to Darren's parents, Lorraine Forcier and Donald Forcier, due to the unusual circumstances of the case.
At the time of his death, Darren Forcier was employed by Macromedia, Inc. and was covered by a group term life insurance policy issued by MetLife. The death benefit was twice his basic annual earnings, which amounted to $208,000 at the time of his suicide. However, there was no written beneficiary designation on file with either his employer or MetLife. The policy specified that if there was no named beneficiary, the benefits will be paid to the surviving spouse, child, parent, or brother or sister, and MetLife may choose to pay all or part of the amount to the estate. The policy also granted MetLife discretionary authority to interpret the terms of the plan and to determine eligibility for and entitlement to plan benefits. Any interpretation or determination made by MetLife pursuant to this discretionary authority will be given full force and effect unless it was shown to be arbitrary and capricious.
The court determined that although Doris was the legal spouse, the marriage was short-lived and there was no indication that Darren's death was related to the payment of the life insurance benefit. Additionally, Darren and Doris intended to separate their financial affairs completely, and there was no mention of the life insurance benefit in their separation agreement. Therefore, the court awarded the proceeds to the next listed class of beneficiaries, Darren's parents Lorraine and Donald Forcier. This decision was made based on the permissive hierarchy of beneficiaries in the policy and to minimize reliance on equitable considerations.
If you are faced with a life insurance beneficiary dispute, contact a lawyer experienced in handling interpleader cases
