Ohio Court of Appeals Upholds Constructive Trust in Favor of Unnamed Beneficiaries


The Ohio Court of Appeals imposed a constructive trust over the proceeds of an ERISA governed life insurance policy for the benefit of the decedent’s children even though the children were not named beneficiaries of the policy. Crites v. Anthem Life Ins. Co., 2014-Ohio-1682 (Ohio Ct. App. 2014). Keith Crites, the decedent, had a life insurance policy through his employer with a death benefit of $30,000. His wife was the named beneficiary and his two children were the named contingent beneficiaries. Crites and his wife entered into a separation agreement (but not a qualified domestic relations order), which provided that Crites would maintain ownership of his employer-sponsored life insurance policy free and clear of any claims of his now ex-wife. Crites died without having removed his ex-wife as beneficiary of the life insurance policy. Crites’s ex-wife and two children each sought payment of the death benefit to them. The court held that Crites’s ex-wife, as the named beneficiary, must receive payment of the death benefit, but ordered that she hold the proceeds subject to a constructive trust in favor of the Crites’s children. While recognizing that ERISA requires that the plans be administered in accordance with the plan documents and that payments must be made to the named beneficiary, the court held that trial courts are empowered to impose constructive trusts on proceeds received from insurance policies governed by ERISA after the designated beneficiary receives the proceeds.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Proskauer - ERISA Practice Center | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.