Hubbard v. Shankle, 138 S.W.3d 474 (Tex. App.—Fort Worth 2004, pet. denied).
Insured removed his ex-wife as the beneficiary of his life insurance
policy replacing her with Beneficiary, a woman whom he had been dating
for about three months after meeting her on the Internet. Insured told
Beneficiary that he wanted her to have the money and that he wanted her
take care of his toddler’s college expenses in the future. Insured died
during sexual activities with Beneficiary. The insurance company paid
the proceeds of the life insurance policy to Beneficiary. Administratrix
of Insured’s estate sued Beneficiary to recover the proceeds. The trial
court determined that Insured voluntarily named Beneficiary as the
recipient of his life insurance proceeds and that Beneficiary had no
legal obligation to use any of the proceeds for the toddler’s future
college expenses. Administratrix appealed.
The appellate court affirmed. The court examined the facts and
determined that there was no evidence to support any of Administratrix’s
claims which included breach of contract, promissory estoppel, actual
fraud, constructive fraud, express trust, resulting trust, constructive
trust, money had and received, unjust enrichment, and quasi-contract.
With regard to Administratrix’s argument that Insured created an express
trust for the toddler, the court noted that Insured’s conduct was
inconsistent with having trust intent. For example, Insured did not
clearly place the proceeds in trust. When he changed the beneficiary
designation on the policy, he did not include any type of trust
designation. Rather, Beneficiary was named individually.
Although not actually stated so by the court, all that really existed
was a daughter, (Administratrix), who was very upset because her father
(Insured) removed his ex-wife (Administratrix’s mother) as the
beneficiary a policy with a face value of over $100,000 naming a woman
as the beneficiary with whom he had a very short-term relationship and
whom “triggered” his death via sexual activity.
Moral: Even a clear, unambiguous designation of a person as a
beneficiary of a life insurance policy may be contested if the
relationship between the beneficiary and the insured is upsetting to the
insured’s family members.