Court Opinion

ID: 3710986
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:45:48.871554+00
Date Added: 2024-06-11T15:43:59.687255
License: Public Domain

Although I concur in the judgment and generally in the opinion, my conclusions are predicated upon a slightly different rationale than expressed in the majority opinion.
Pursuant to the divorce decree, John D. Paff was required to maintain a $100,000 life insurance policy payable either to, or for the benefit of, John William and Eric Newton Paff. Reservation of the right to John D. Paff to change the beneficiary of the life insurance policy once issued is inconsistent with the requirement that the beneficiaries be the two minor children. Any attempted change of beneficiary contrary to the decree is void at least in the absence of injury to an innocent third party caused by reliance upon the attempted change of beneficiary. Campbell v. Prudential Ins. Co. (1955), 73 Ohio Law Abs. 262. See, also, Annotation 59 A.L.R. 3d 9. As well stated in 44 American Jurisprudence 2d (Rev.) 733, Insurance, Section 1751, "* * * if by contract or by way of gift the right to change the beneficiary is waived, the beneficiary secures a vested interest which may not be defeated by the insured attempting to change the beneficiary, as, for instance, where the insured in a separation agreement agrees to keep a policy of insurance in force and to name as beneficiaries therein certain individuals."
Under the circumstances herein, the two minor children obtained vested interests as beneficiaries upon issuance of the policy similar to that existing where no right to change the beneficiaries is reserved by the insured. See Manhattan Life Ins.Co. v. Smith (1886), 44 Ohio St. 156, and Union Central Life Ins.Co. v. Buxer (1900), 62 Ohio St. 385.
Accordingly, the attempted change of beneficiary to the intervivos trust created by John D. Paff was void and of no effect because it interfered with the vested rights of the named beneficiaries and was without their "consent." They remain the beneficiaries of the policy, and the proceeds thereof should be paid accordingly as ordered in the majority opinion.
On the other hand, further participation by the two sons as beneficiaries of the inter vivos trust would be inconsistent with the terms of the trust which anticipate that the proceeds of the Transamerica Life policy as well as those of the Great West Life policy would become part of the trust res. Thus, application of Part A(I), Section 4(a) of the trust which provides that, "After a share has been set aside for a child * * * as provided in paragraph (b), below, such child * * * shall no longer be beneficiaries of this *Page 240 
trust * * *." The net result is that the two sons receiving the life insurance proceeds cease to be beneficiaries of the trust except contingently as heirs of the grantor under Part A(I), Section 4(e) of the trust.
For these additional reasons, I concur in the opinion and judgment.