McClain v. Beder
In McClain v. Beder, 25 Ariz. App. 231, 542 P.2d 424 (1975), an estate of a deceased insured sued to recover proceeds of a life insurance policy. Id. at 232, 542 P.2d at 425.
The beneficiary under the policy was the decedent's former wife. Id.
Because the decedent had not removed his ex-wife as the beneficiary under the policy after the parties divorced, we held it was "sounder public policy to enforce the terms of the insurance contract," which meant the ex-spouse was entitled to the life insurance proceeds. Id.
Indeed, the Court also rejected the estate's argument the Court should view a provision in the decree awarding each spouse all of his or her personal property as effecting a change in the beneficiary. Id. at 232-33, 542 P.2d at 425-26.
The Court relied on cases from other jurisdictions holding divorce, by itself, incapable of altering the terms of an insurance contract and recognizing that, if a divorced insured spouse fails to exercise his or her power to change the beneficiary, the proceeds of the policy, as a matter of contract law, vest in the ex-spouse on the death of the insured.