## Facts

- Robert A. Rosen purchased two life insurance policies totaling about $35,000, originally naming his three minor sons as beneficiaries, with distributions deferred until each reached age 25.
- While incurably ill, Rosen signed blank change-of-beneficiary forms and instructed his agent to name his father, Jacob Rosen, as beneficiary.
- After Rosen’s death, the insurers filed interpleader actions because both Jacob Rosen and the minor children (through a guardian ad litem) claimed entitlement to the proceeds.
- The children contended that Jacob Rosen was intended to hold the proceeds for them as trustee; an undue influence contention was not pursued at trial.
- The chancellor found Rosen intended his sons to have the beneficial use of the proceeds and changed the beneficiary to free the funds from restrictive policy provisions and place them with an adult able to use the money for the children’s benefit.
- The chancellor concluded a trust existed but ordered payment to a guardian for the children because the trust terms were not particularized and guardianship was viewed as preferable.
- Jacob Rosen appealed, seeking payment to him under the beneficiary designation and challenging the diversion of proceeds to a guardian.

## Issues

1. Whether the evidence supported the finding that the insured intended the named beneficiary (his father) to hold the insurance proceeds in trust for the insured’s minor children.
2. If a trust existed, whether the court could divert proceeds from the named beneficiary-trustee to a guardian because a guardianship was administratively preferable or the trust terms were not detailed.
3. Whether the beneficiary’s litigation position asserting personal ownership, without more, showed disqualifying hostility sufficient to bypass or remove him as trustee.

## Decision

- The appellate court affirmed the finding that the insured intended the proceeds to be held for the beneficial use of his minor sons, creating a trust with Jacob Rosen as trustee.
- The appellate court reversed the portion of the decree directing payment to a guardian rather than to Jacob Rosen as trustee.
- The court held that the trustee was not disqualified merely because he litigated for outright ownership; such litigation alone did not establish hostility warranting denial of the trusteeship.
- The court ordered the proceeds paid to Jacob Rosen as trustee for the children’s benefit.

## Legal Principles

- A life insurance beneficiary designation may be treated in equity as creating an implied or constructive trust when evidence shows the insured intended the named beneficiary to hold proceeds for others, including minor children.
- When a trust is found to exist based on the settlor’s intent, a court should implement and supervise that trust rather than replace it with a different protective arrangement solely for administrative convenience.
- A trustee is not disqualified solely because he asserts an adverse claim in litigation; removal or bypass requires a stronger showing of hostility or conduct inconsistent with fiduciary obligations.

## Conclusion

The appellate court enforced the insured’s intent by recognizing a trust in the insurance proceeds for the minor children and requiring payment to the named beneficiary as trustee, holding that the trial court could not substitute a guardianship simply because it preferred that arrangement or the trust terms were not fully specified.


Rosen v. Rosen, 167 So. 2d 70 (Fla. Dist. Ct. App. 3d Dist. 1964)