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Order Appointing Guardian Sets Limits of Guardian’s Powers to Change Life Insurance Beneficiary, Says Court

Blogs, Life Insurance

A court-appointed a father as his adult, cancer-stricken son’s legal guardian. A week later, the father fills out a change of beneficiary form for the son’s life insurance. The change would mean that, upon the son’s death, the son’s wife would no longer be entitled to 100% of the life insurance proceeds, and instead would be entitled to 15% and that the remaining 85% would go to a trust for the child of the son and his wife. The father never discussed this change with the son, who did not know the beneficiary change form even existed. The court ended the father’s appointment as guardian, and shortly thereafter, the son died. The beneficiary change form had been in a drawer for some time, and then after the son’s death, the father sent the form to the insurance company. The wife claimed that she was entitled to 100% of the life insurance proceeds, while the father said that the insurer should send her only 15%.

A Utah court of appeals concluded, based on these facts, that the father was not entitled to make a change of beneficiary, since the order appointing him guardian limited the scope of his responsibilities to the son’s existing $9,000 estate, and did not extend to additional prospective property under the life insurance policy. Said the court: “a guardian’s authority is limited to that granted in the order of appointment.” Additionally, a guardian must obtain court approval over the property, other than personal items, that the guardian believes is in need of protection and the father never obtained such additional authority in this case. Accordingly, the daughter-in-law was entitled to 100% of the proceeds.

A copy of the opinion captioned Andrus v. Northwestern Mutual Life Ins. Co., 241 P.3d 385 (Utah Ct. App. 2010), is available here.