## Facts

- Ruth Allen and Arnold Allen married in 1963.
- In 1965, Arnold began working for Kelly‑Springfield Tire Company and designated Ruth as beneficiary of his employer-provided basic group life insurance.
- Ruth and Arnold divorced in January 1976. They had one child, Timothy (age 10).
- At the time of the divorce, the life insurance in place was worth about $9,500, and the dissolution judgment treated it as a $10,000 policy.
- The dissolution judgment required Arnold to maintain in force all life insurance then carried on his life, with Timothy as the “main beneficiary.”
- Later in 1976, Arnold married Carolyn Allen.
- Carolyn testified that in 1979 Arnold had her complete a beneficiary card and form naming Carolyn as beneficiary and said he would submit it at work the next day; Carolyn did not know whether he ever did.
- Carolyn also acknowledged she understood Ruth remained the beneficiary at least until any change was made and that Ruth and Arnold had agreed Timothy would receive $10,000 in proceeds.
- By the time of Arnold’s death in June 1989, his coverage totaled $80,000 ($20,000 basic coverage plus $60,000 contributory coverage he elected later).
- Kelly‑Springfield’s benefits manager testified the only beneficiary card in Arnold’s file named Ruth as beneficiary.
- Kelly‑Springfield deposited the proceeds into escrow and was dismissed before trial by stipulation.
- After a bench trial, the circuit court found Carolyn did not prove Arnold made an effective beneficiary change and ruled Timothy’s claim under the dissolution judgment was superior to the beneficiary designation to the extent of the divorce obligation; it ordered the proceeds paid to Ruth and Timothy. Carolyn appealed.

## Issues

1. Whether the trial court’s finding that Arnold did not effectively change the beneficiary designation from Ruth to Carolyn was against the manifest weight of the evidence.
2. Whether the 1976 dissolution judgment barred Ruth, as a former spouse, from receiving any of the life-insurance proceeds despite being the named beneficiary on file.
3. Whether Timothy’s equitable rights under the dissolution judgment were limited to the amount of coverage contemplated at the time of the divorce (about $10,000) or extended to later-increased coverage, including contributory insurance.
4. Whether Carolyn could use a statutory “trust” theory (based on Arnold’s later election of contributory coverage) to prevent Ruth from receiving the contributory proceeds, and whether theories not presented in the trial court could be raised on appeal.

## Decision

- The appellate court affirmed.
- The court upheld the finding that Carolyn failed to prove a valid change of beneficiary: the employer’s records showed only one beneficiary card (Ruth), and the trial court was entitled to credit that documentary evidence over Carolyn’s uncorroborated account.
- The dissolution judgment did not automatically divest Ruth of her contractual status as named beneficiary; instead, it created enforceable rights in Timothy.
- Timothy’s equitable claim arising from the dissolution judgment was limited to securing the amount of insurance the decree contemplated at the time of dissolution (about $10,000), not an open-ended right to all later-added or increased coverage.
- The court rejected Carolyn’s attempt to treat Arnold’s contributory insurance election as creating a statutory trust that would defeat Ruth’s beneficiary rights, and it declined to consider theories raised for the first time on appeal or inconsistent with those advanced in the circuit court.

## Legal Principles

- A claimed change of life-insurance beneficiary must be proven by competent evidence; intent or an unconfirmed, unfiled form does not defeat the beneficiary designation shown in the insurer/employer records.
- On review of a bench trial, the appellate court will not disturb factual findings unless they are against the manifest weight of the evidence, and it defers to the trial court on credibility determinations.
- A dissolution judgment requiring a parent to maintain life insurance for a child’s benefit creates an equitable right enforceable against the recipient of proceeds, but it does not, by itself, erase the named beneficiary’s contractual status.
- Absent clear language extending the obligation, the child’s equitable recovery is generally limited to the coverage amount contemplated by the dissolution judgment at the time it was entered.
- A “trust” over insurance proceeds is not created merely because an employee later elects additional coverage; a statutory trust requires conditions beyond an increased benefit election.
- A party may not raise on appeal a new legal theory that was not presented to the trial court, and inconsistent theories are treated as waived.

## Conclusion

Allen v. Allen affirmed a judgment distributing group life-insurance proceeds to Ruth as the only beneficiary on file, while protecting Timothy’s limited equitable right created by the divorce decree (approximately the $10,000 coverage contemplated at dissolution); Carolyn, the second wife, recovered nothing because she did not prove a valid beneficiary change and could not defeat Ruth’s contractual beneficiary status through new or unsupported theories.


Allen v. Allen, 589 N.E.2d 1133 (1992)