The Story
Ryan Hadfield, a detective with the Hudson County Prosecutor’s Office committed suicide. At the time of his death, he was divorced from his former spouse, Rose Ann Lillo. Prior to their marriage, Mr. Hadfield had a life insurance policy as a member of the Police and Firemen Retirement System, issued by the Prudential Insurance Company. He named his sister as beneficiary.
After his marriage to Rose Ann Lillo, he named her as his primary beneficiary, with his sister as contingent beneficiary. The decedent never changed his beneficiary after his divorce.
Lillo and Hadfield’s estate filed claims seeking the proceeds from the life insurance policy
Hadfield’s estate wins, according to NJ Appellate Division Judge Dorethea Wefing. Hadfield v. Lillo, A-5140-07. Here’s the Court’s rationale:
- N.J.S.A. 3B:3-14 states that after executing a will, if the testator is subsequently divorced, the divorce effectively revokes any dispositions or appointment of properties made by will to a former spouse
- The Legislature amended 3B:1-1 to include a Life Insurance Policy as a “governing instrument” in 2005
- In re Will of Reilly, 201 N.J. Super. 306 (App. Div. 1985), the Court ruled that a will in favor of a spouse where the marriage had been annulled, was revoked by operation of law; despite the fact that N.J.S.A. 3B:3-14 was not in effect at the time of Reilly’s death
Judge Wefing saw no reason to distinguish a life insurance policy and a will. Same rationale applies to both. The former wife has no vested interest in the proceeds of the policy absence a written agreement to the contrary.
Ms. Lillo’s attorney argued to no avail that:
- The relevant portion of the Police and Fireman’s Retirement System statute, N.J.S.A. 43:16A-1 to -68, excludes a life insurance policy from the definition of governing instrument, and
- The amendment to N.J.S.A. 3B:3-14 should not apply because it was not in effect at the time of the divorce.
Commentary:
Judge Wefing got it right. Why would a divorced spouse want to share life insurance proceeds with his former spouse? The parties can enter a written agreement to preserve the former spouse’s interest in the policy.
The fact that these statutes are applied retroactively is always cause for concern. However, in this case of first impression, the facts cry out that it was clearly not the intent of the decedent to have the proceeds from his life insurance policy inure to the benefit of his former spouse. For example:
- The marriage only lasted 2 years
- Lillo filed for an uncontested divorce and waived alimony
- There is no mention of any children of the marriage
My impression is that Lillo solely relies upon the decedent’s failure to perform a ministerial act of changing beneficiaries to support her claim to the money. Not enough to win.
Did Judge Wefing make the right decision? How about the retroactivity argument of counsel for Lillo?
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