Cook v. Equitable Life Assurance Society
428 N.E.2d 110 (1981)

  • Douglas bought a life insurance policy with Equitable Life and named his wife Doris as the beneficiary. Then he got a divorce.
    • The divorce agreement made no mention of the insurance policy.
  • Douglas stopped making payments on the insurance policy. Equitable notified him that the policy was being converted to a paid-up term policy with an expiration date 30 years in the future.
    • The notification mentioned that Douglas retained the right to change the beneficiary with written consent.
  • Douglas went on to marry Margaret and have a kid named Daniel.
  • Douglas wrote a holographic will that left the insurance policy to Margaret and Daniel.
    • However, he never bothered to write to Equitable and change the beneficiary.
  • Douglas died. Margaret filed a claim with Equitable for the money from the policy. Equitable went to court in an interpleader action to determine who to give the money to.
  • The Trial Court found that the money should go to Doris. Margaret appealed.
    • As far as the Trial Court was concerned, the contract on file with Equitable clearly indicated that Doris was still the beneficiary.
  • The Appellate Court affirmed.
    • Margaret unsuccessfully argued that the will was a valid attempt to change the provisions of the insurance policy.
    • The Appellate Court found that strict compliance was not required to change the beneficiary, but Douglas had taken no actions at all.
    • The Appellate Court sympathized with Margaret, but found that there was good public policy in providing certainty to beneficiaries and insurance companies about who should get the money.
      • They also noted that if Margaret had been vigilant and noticed the problem prior to Douglas’ death, it would have been easy to fix.
  • Remember, non-probate contracts (aka will substitutes) take precedence over wills, and wills take precedence over intestate succession.
    • So the basic rule is that if you have a valid will and a valid insurance policy, the beneficiary listed on the insurance policy trumps the beneficiary listed in the will.
  • Under the Uniform Probate Code (which was not in effect when this case was decided), divorce revokes by operation of law not only wills, but also will substitutes.
    • If the Uniform Probate Code had been in effect, Doris’ name (as well as her relatives) would have been stricken from the insurance policy and the now beneficiary-less policy would have reverted to Douglas’ estate.