Employee’s Equitable Interest in Boss’s Life Insurance Policy Trumps Boss’s Ability to Designate Wife as Beneficiary

In Shuttle v. Ligor (Mass. App. Ct., Nov. 20, 2015) the Massachusetts Court of Appeals held an employer was equitably estopped from changing the beneficiary of his life insurance policy from his employee to his wife, but the wife (who received the policy proceeds) owed nothing to the employee. An employee of many years had been informed by her boss that she was designated as a beneficiary under his life insurance policy. The employee was told that her boss’s designation of
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Equity Trumps “Love.” And Designated Beneficiaries. With ERISA’s Blessing. Court Imposes Constructive Trust on Life Insurance Proceeds and Insurer Triumphs Through Interpleader

In McCarthy v. Estate of McCarthy, 2015 U.S. Dist. LEXIS 153107 (SDNY, November 10, 2015), a federal judge imposed a constructive trust on the proceeds of a life insurance policy in favor of the decedent’s ex-wife and children over his girlfriend. Equity required the constructive trust due to the decedent’s breach of his divorce agreement, regardless of who was actually the designated beneficiary. Pursuant to the terms of a 2012 divorce settlement, the decedent agreed to a number of conditions
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