Ex-Wife May Get Constructive Trust Over Life Insurance, Says Oregon Supreme Court

November 22, 2010
A woman may be entitled to a constructive trust over the proceeds of a life insurance policy her ex-husband was supposed to maintain for her benefit under the terms of her divorce, the Oregon Supreme Court has ruled.
The decision reverses a state appellate ruling. The plaintiff sued for unjust enrichment, alleging that she was entitled to a portion of the proceeds from a $600,000 life insurance policy on her ex-husband. She contended that she was entitled to $100,000 under the policy because her divorce decree required that the husband maintain life insurance in that amount for her benefit as well as for the benefit of their child.
The named beneficiary on the policy was the defendant, the husband's live-in girlfriend.
The defendant argued that the plaintiff was not entitled to any portion of the life insurance because the policy did not exist at the time of the plaintiff's divorce.
But the court held that "an obligation to obtain an insurance policy naming an ex-spouse as beneficiary may confer an equitable interest in a later-acquired policy, if the obligation in some fashion clearly identifies that policy as one of its objects."
The court held that the life insurance provision in the plaintiff's divorce decree was sufficient to vest in her an equitable interest in the policy at issue because it identified "any" policy owned by the husband at the time of his death.
it remanded the matter for consideration of whether the plaintiff could establish the other elements of her unjust enrichment claim, including whether the defendant had notice of the husband's obligation to name the plaintiff as beneficiary.