From time to time we will publish recent local cases or legislative bills:
Background: As part of a divorce decree, the decedent promised to obtain a life insurance policy for the benefit of his wife as trustee for his child. Decedent never did this. Instead, he obtained a life insurance policy naming his girlfriend as the beneficiary. The ex-wife sued the girlfriend asking the court to impose a constructive trust on the portion of life insurance ($100,000 of the $600,000) that decedent promised to obtain.
Holding: In order to obtain constructive trust over the life insurance policy, the ex-wife must prove that the decedent gave the beneficiary property that originally belonged to the children and that the beneficiary knew or should have known of the wrongfulness of the decedent’s actions. The ex-wife must show the beneficiary is unjustly enriched. The fact that the divorce decree included a provision that stated the ex-wife would have constructive trust of any life insurance policy if he breached his obligation was unenforceable against the girlfriend because she was not a party to that agreement.
Note: If not for the fact that the decedent was indeed deceased, his ex-wife would have killed him.