Minnesota Supreme Court Grants Review In Angell Death Benefits Case
On March 31, 2010, the Minnesota Supreme Court granted review of the Minnesota Court of Appeals decision in In re the Marriage of Loretta Marie Angell and Gordon William Angell, Jr. The Angell decision focuses heavily on the marital and non-marital characteristics of life insurance proceeds, death-gratuity benefits and military death benefits. Over $500,000 in proceeds were at issue.
In Angell, former husband and wife in a marriage dissolution proceeding respectively challenged the district court's classification and division of death benefits paid after their son died during active military duty. The son had named only his mother as the beneficiary of his military life-insurance policy, which, by federal law, also made her his beneficiary in a federal death-gratuity program available to active-duty service members.
The district court classified these funds as Loretta Angell's exclusive nonmarital property but awarded Gordon Angell a share to prevent an unfair hardship.
Loretta Angell argued that this award violated federal anti-attachment statutes protecting military death benefits.
Gordon Angell filed a notice of review challenging the district court's property classification. He argued that the district court should have classified the life-insurance and death-gratuity benefits as marital property because Loretta Angell did not acquire them as a gift, bequest, devise, or inheritance and because she did not overcome the presumption that property accumulated during marriage is marital property.
Judge Ross concluded that the district court properly classified the life-insurance and death-gratuity benefits as Loretta Angell's nonmarital property, and affirmed the district court‟s classification. But, the Court of Appeals also opined that federal law prohibits the district court from relying on state law to divide the benefits between the parties.
This appears to be an issue of first impression in Minnesota. Interesting, too, that a conflict of laws issue between state and federal statutes found its way into family court. For these reasons, it appears the Minnesota Supreme Court wishes to weigh in. We'll keep you posted.
