## Facts

- A decedent held two life insurance policies naming his wife, Bernadine J. Schwarz, as beneficiary.
- Each policy allowed beneficiary changes by filing a written request with the insurer.
- On September 7, 1975, one day before his death, the decedent wrote and mailed a handwritten letter to his daughter, Debora Schwarz.
- The letter stated the decedent intended his daughters, Debora Schwarz and Denise G. Lemke, to receive his assets at death, expressly listing a life insurance policy and other employment-related death/retirement benefits among those assets.
- The letter was framed as evidence for anticipated legal disputes and was received after the funeral.
- Evidence at trial indicated the marital relationship between the decedent and Bernadine had substantially deteriorated.
- After notice of competing claims, the insurers placed the proceeds in a trust account pending resolution.
- The district court, without making findings on intent or the letter’s legal effect, awarded the full proceeds to Bernadine based on her status as named beneficiary.

## Issues

1. Whether the decedent’s handwritten letter validly changed the policies’ beneficiary designation from his wife to his daughters despite not following the policies’ formal change-of-beneficiary procedure.

## Decision

- The Minnesota Supreme Court reversed the district court.
- The court held the handwritten letter effectively changed the beneficiary designation to the daughters.
- The court directed that the daughters were entitled to the policy proceeds.

## Legal Principles

- A court of equity may recognize a change of life-insurance beneficiary despite noncompliance with policy formalities when:
  - the insured intended to change the beneficiary; and
  - the insured took affirmative action and did substantially all he reasonably could to effect that intention.
- Change-of-beneficiary procedures are primarily for the insurer’s protection; when the insurer is not prejudiced and does not object, substantial compliance may suffice as between competing claimants.
- Clear, written evidence of intent, coupled with timely action under circumstances leaving little opportunity to complete formal steps, can satisfy the substantial-compliance requirement.

## Conclusion

The court enforced the insured’s clearly expressed intent to substitute his daughters as beneficiaries, holding that his handwritten letter and related circumstances constituted substantial affirmative action sufficient to effect a beneficiary change in equity, even without strict compliance with policy procedures.


Lemke v. Schwarz, 286 N.W.2d 693 (Minn. 1979)