## Facts

- Lincoln Benefit Life Company issued a $125,000 life-insurance policy on Neftaly Guerrero’s life naming his then-wife, Bertha Guerrero, as primary beneficiary and Bertha’s mother, Ignacia Cisneros, as contingent beneficiary.
- Neftaly and Bertha divorced in New Mexico in 2003; the divorce decree dissolved the marriage but did not mention the policy or preserve Bertha’s beneficiary status.
- In 2008, Neftaly and Bertha met with an insurance agent to separate their insurance arrangements so each would own an independent policy; Bertha completed paperwork relating to her own policy, and Neftaly signed to authorize that separation.
- Neftaly did not submit a change-of-beneficiary form for his policy after the divorce; the agent stated Neftaly was told he could change beneficiaries and declined to complete any form.
- After Neftaly’s death, Bertha claimed the proceeds as named beneficiary; the estate (through its personal representative, Imara Guerrero) asserted the divorce revoked Bertha’s beneficiary status under New Mexico’s revocation-on-divorce statute.
- The contingent beneficiary, Cisneros, disclaimed any interest, leaving Bertha and the estate as the competing claimants.
- Lincoln Benefit filed an interpleader-type action to determine entitlement to the proceeds; the estate moved for summary judgment.

## Issues

1. Whether New Mexico’s revocation-on-divorce statute applied to revoke an ex-spouse’s beneficiary designation in a life-insurance policy upon divorce.
2. Whether federal law (including ERISA) preempted or otherwise displaced application of the New Mexico statute to this policy.
3. Whether evidence of the decedent’s post-divorce intent or conduct (including the 2008 meeting and alleged statements) rebutted the statutory revocation and preserved or restored the ex-spouse’s beneficiary status.
4. If the ex-spouse was treated as having predeceased the insured and the contingent beneficiary disclaimed, whether the estate was entitled to the proceeds under the policy’s default payment provisions.

## Decision

- The court granted summary judgment to Imara Guerrero as personal representative of the estate.
- The court held that New Mexico’s revocation-on-divorce statute applied and revoked Bertha Guerrero’s beneficiary designation by operation of law upon the 2003 divorce.
- The court rejected the argument that federal law preempted application of the state statute on the facts presented.
- The court held that the 2008 meeting, the insured’s failure to change the beneficiary, and alleged private statements of intent were legally insufficient to rebut statutory revocation or to reinstate Bertha as beneficiary.
- With the former spouse treated as predeceased and the contingent beneficiary having disclaimed, the proceeds were payable to the estate.

## Legal Principles

- Under New Mexico’s revocation-on-divorce statute, divorce generally revokes revocable beneficiary designations in governing instruments benefiting a former spouse, and the former spouse is treated as having predeceased the decedent unless an exception applies.
- Statutory revocation may be rebutted only through legally operative, explicit preservation of the ex-spouse’s status, such as express terms in a governing instrument, a court order, or a qualifying contract tied to marital property division.
- Subjective intent not communicated through the required formal mechanisms, private statements, and inaction (including failure to change a designation) do not reinstate an ex-spouse as beneficiary after divorce.
- When revocation-on-divorce applies and all designated beneficiaries are eliminated (by deemed predecease or disclaimer), policy default provisions control, which may result in payment to the insured’s estate.

## Conclusion

The court held that the insured’s divorce automatically revoked his ex-wife’s life-insurance beneficiary designation under New Mexico law, that no federal preemption barred the statute’s application here, and that post-divorce conduct and alleged intent did not restore the ex-wife’s beneficiary status; therefore, the policy proceeds were payable to the insured’s estate.


Lincoln Benefit Life Co. v. Guerrero, No. 14-1077 JCH/WPL, 2016 WL 4547157 (D.N.M. 2016)