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Divorce - Implied Revocation of Beneficiary Designation - § 30-4-17, Ala. Code 1975

Blalock v. Sutphin and New York Life Ins. Co., [Ms. 1170879, Oct. 26, 2018] __ So. 3d __ (Ala. 2018). The Court (Sellers, J.; and Stuart, C.J., and Bolin and Wise, JJ., concur; Shaw, J. concurs in the result) affirms a judgment of the Dekalb Circuit Court declaring the decedent’s daughter the sole beneficiary of his life insurance policy.

The insured and Blalock were divorced in 2016 and the life insurance policy was not addressed in the divorce judgment. After the divorce, the insured never changed the beneficiary designation giving Blalock a 50% share. Ms. *2. Applying § 30-4-17, Ala. Code 1975, the circuit court ruled that “Blalock’s beneficiary designation had been revoked upon her divorce from [the insured].” Ms. *3.

The Court rejected Blalock’s impairment-of-contracts argument, holding that “[i]n 2015, when § 30-4-17 became effective, it did not retroactively impair any existing contractual obligations. Instead, it created a prospective default rule, i.e., that a divorce effectively revokes any revocable beneficiary designation in favor of the former spouse, absent further action by the policyholder.” Ms. *13.

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