New York court awards policy to estate
In Protective Life Insurance Company v. Mehrkar, the federal court for the Southern District of New York considered a dispute regarding life insurance benefits between the estate and the ex-wife of the insured. Facing conflicting claims to the life insurance benefits, the insurance company filed an interpleader in federal court. The court decided that the estate of the insured should receive the disputed life insurance benefits, not his-ex-wife.
Background of the life insurance dispute
Background: The dispute centers on Anthony Previte's life insurance policy. Anthony Previte was initially married to Cheryl Previte (now Cheryl Mehrkar), who was designated as the primary beneficiary. They divorced in May 1996, and Anthony Previte later married Stacy Previte in April 2008. Anthony Previte died on July 11, 2022.
Insurance Policy Details: The policy was issued by Aetna Life Insurance in 1993, with an initial amount of $54,902. The policy provided that the rights of any beneficiary who died before the insured belong to the policy owner, Anthony Previte.
Claims on the Death Benefit: After Anthony Previte's death, Cheryl Mehrkar claimed the death benefit as the designated primary beneficiary. The estate of Anthony Previte, represented by Stacy N. Previte, contested this, citing New York’s revocation-upon-divorce statute that would revoke Mehrkar's beneficiary status upon her divorce from Anthony Previte.
The federal court’s interpleader ruling
New York's Revocation-upon-Divorce Statute: This revokes a former spouse's beneficiary designation in certain types of policies and accounts upon divorce. The public public policy of New York is to assume that insured’s do not want theit ex-spouses to receive their life insurance benefits. The exception is unless they specifically designate otherwise after the divorce.
Application to Life Insurance Policies: In this case, the court had to determine whether the revocation-upon-divorce statute applied to the life insurance policy in question. The policy named Cheryl Mehrkar as the primary beneficiary when she was married to Anthony Previte. However, following their divorce, the court had to assess if her beneficiary status was automatically revoked.
The court ruled that, based on New York’s revocation-upon-divorce statute, Cheryl Mehrkar's designation as the beneficiary was revoked upon her divorce from Anthony Previte. Therefore, she could not receive the disputed life insurance benefits.
The court also considered the implications of the policy terms and the fact that Anthony Previte had not named a new beneficiary after his divorce from Cheryl Mehrkar. This lack of action on Anthony Previte's part led to the conclusion that the estate was the rightful claimant to the death benefit.
Many states have laws that revoke life insurance beneficiary designations after a divorce. However, the laws are often include different provisions and are often interpreted differently, particularly if a court allows specific extrinsic evidence of intent. And even many lawyers get confused regarding whether federal or state law applies to a beneficiary dispute. When faced with competing claims, the life insurance company will file an interpleader. We have substantial experience representing beneficiaries in interpleaders.
