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Life Insurance Benefits

April 13, 2015 | Posted In Family Law - Family Law |

When you get married, not only do you gain a life partner, but you also receive certain benefits from the government that are only afforded to married couples—recognition as your spouse’s partner in medical coverage, health and life insurance, and other federally designated areas are a few such benefits. But according to a recent ruling in the New Jersey appellate court, there are some cases where marital benefits are overruled by other factors.

Fox v. Lincoln Financial Group

In Fox v. Lincoln Financial Group, Evanisa Fox, who is from Brazil, was married to Morris County resident Michael Fox in July of 2012. Fox had been previously married to a woman listed in the court documents as Gail and was divorced in 1996. As a truck driver, Fox had taken out a life insurance policy through his employer which was worth about $100,000, and after his divorce, he named his sister, Mary Ellen Scarpone, the sole beneficiary of the policy.

When Fox and Evanisa were married, Evanisa began the process of becoming a naturalized U.S. citizen. As part of this, Fox signed a federal immigration form, which guaranteed he would support Evanisa at 125 percent of the poverty level. However, he made no changes to his life insurance policy, and when he died in an accident in November of 2012, his sister remained the listed beneficiary.

After her husband’s death, Evanisa Fox filed a claim against Scarpone and the policy issuer, Lincoln Financial Group, for the life insurance funds. Her suit claimed that she would be unable to financially support herself without her husband, and without the funds, it would be “extremely difficult for [her] to survive.” Scarpone challenged Evanisa’s claim and it was dismissed.

Bright-Line Ruling

Evanisa took her claim to the Appellate Court and asked the judges to create a bright-line rule, making the surviving spouse the automatic beneficiary of a deceased spouse’s life insurance policies, no matter who is listed as the beneficiary. The appellate judges boiled down her appeal to a single question: “Should the law of insurance reflect the changed circumstances attendant to marriage in the way it reflects changed circumstances with respect to divorce?”

Currently, divorce automatically revokes beneficiary status to a named ex-spouse on any “governing instrument,” which includes an insurance policy, according to N.J.S.A. 3B:3-14. However, the laws state nothing about automatically granting beneficiary status to a newly-married spouse without some effort to name the spouse as beneficiary on the part of the policy owner. The appellate court refused to make changes to this law.

Under N.J.S.A 3B:5-15, allowances are made for surviving spouses who have been unintentionally omitted from a premarital will, but this statute does not govern any non-probate assets, which includes life insurance policies.

The New Jersey family lawyers at Helmer, Conley, and Kasselman, PA represent clients who have cases pending in family court regarding beneficiary status or other spousal privilege-related claims. To discuss your circumstances, contact an HCK attorney for a consultation today.

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