In Estate of Patricia Quinn v. Michael F. Quinn, Docket No. A-0855-13T3, 2015 N.J. Super. Unpub. Lexis 913 (N.J. App. Div. Apr. 22, 2015), the Appellate Division of the New Jersey Superior Court held that the trial court should have exercised its discretion to declare decedent's widow the beneficiary of decedent's life insurance policy despite the fact that the policy named decedent's ex-wife as the beneficiary.
Plaintiff, Patricia Quinn, and decedent, Michael Quinn, divorced in 1970. After their divorce, the parties were involved in post-judgment litigation for over 40 years. In 2011, the parties reached a settlement agreement in which Michael agreed to pay approximately $12,500 to Patricia and another $4,000 to her legal counsel. As security for the settlement payments, Michael amended his life insurance policy by changing the beneficiary designation from his current wife, Marita Quinn, to his former wife, Patricia. The policy was to be held by Patricia's attorneys, but the parties had agreed that once the settlement amount was paid to Patricia and her attorneys, the policy would be released back to Michael. On December 2, 2012, Michael passed away before making the required payments to Patricia's attorneys.
Shortly after Michael's death, the insurance company issued Patricia a check for $234,705.74. Marita disputed the payment from the insurance company and argued that Patricia was not entitled to the entire amount. The Appellate Division held that the judge in the lower court had discretion to award the policy funds to Marita, finding that Michael intended for the funds to benefit Marita. The court explained that the "insurance-beneficiary" designation did not control under the circumstances, stating that "[a] beneficiary designation must yield to the provisions of a separation agreement expressing an intent contrary to the policy provision."