Sveen v. Melin

Citation138 S.Ct. 1815,201 L.Ed.2d 180
Decision Date11 June 2018
Docket NumberNo. 16–1432.,16–1432.
Parties Ashley SVEEN, et al., Petitioners v. Kaye MELIN.
CourtUnited States Supreme Court

Adam G. Unikowsky, Washington, DC, for Petitioners.

Shay Dvoretzky, Washington, DC, for Respondent.

Daniel Doda, Doda McGeeney, Rochester, MN, Adam G. Unikowsky, James T. Dawson, Jenner & Block LLP, Washington, DC, Clifford W. Berlow, Jenner & Block LLP, Chicago, IL, for Petitioners.

Robert J. Lange, R.J. Lange, Lange Law Firm, P.A., Bloomington, MN, Shay Dvoretzky, Jeffrey R. Johnson, Andrew J. M. Bentz, Matthew J. Rubenstein, Jones Day, Washington, DC, for Respondent.

Justice KAGAN delivered the opinion of the Court.

A Minnesota law provides that "the dissolution or annulment of a marriage revokes any revocable[ ] beneficiary designation[ ] made by an individual to the individual's former spouse." Minn. Stat. § 524.2–804, subd. 1 (2016). That statute establishes a default rule for use when Minnesotans divorce. If one spouse has made the other the beneficiary of a life insurance policy or similar asset, their divorce automatically revokes that designation—on the theory that the policyholder would want that result. But if he does not, the policyholder may rename the ex-spouse as beneficiary.

We consider here whether applying Minnesota's automatic-revocation rule to a beneficiary designation made before the statute's enactment violates the Contracts Clause of the Constitution. We hold it does not.


All good trust-and-estate lawyers know that "[d]eath is not the end; there remains the litigation over the estate." 8 The Collected Works of Ambrose Bierce 365 (1911). That epigram, beyond presaging this case, helps explain the statute at its center.

The legal system has long used default rules to resolve estate litigation in a way that conforms to decedents' presumed intent. At common law, for example, marriage automatically revoked a woman's prior will, while marriage and the birth of a child revoked a man's. See 4 J. Kent, Commentaries on American Law 507, 512 (1830). The testator could then revive the old will or execute a new one. But if he (or she) did neither, the laws of intestate succession (generally prioritizing children and current spouses) would control the estate's distribution. See 95 C.J.S., Wills § 448, pp. 409–410 (2011) ; R. Sitkoff & J. Dukeminier, Wills, Trusts, and Estates 63 (10th ed. 2017). Courts reasoned that the average person would prefer that allocation to the one in the old will, given the intervening life events. See T. Atkinson, Handbook of the Law of Wills 423 (2d ed. 1953). If he'd only had the time, the thought went, he would have replaced that will himself.

Changes in society brought about changes in the laws governing revocation of wills. In addition to removing gender distinctions, most States abandoned the common-law rule canceling whole wills executed before a marriage or birth. In its place, they enacted statutes giving a new spouse or child a specified share of the decedent's estate while leaving the rest of his will intact. See Sitkoff & Dukeminier, Wills, Trusts, and Estates, at 240. But more important for our purposes, climbing divorce rates led almost all States by the 1980s to adopt another kind of automatic-revocation law. So-called revocation-on-divorce statutes treat an individual's divorce as voiding a testamentary bequest to a former spouse. Like the old common-law rule, those laws rest on a "judgment about the typical testator's probable intent." Id., at 239. They presume, in other words, that the average Joe does not want his ex inheriting what he leaves behind.

Over time, many States extended their revocation-on-divorce statutes from wills to "will substitutes," such as revocable trusts, pension accounts, and life insurance policies. See Langbein, The Nonprobate Revolution and the Future of the Law of Succession, 97 Harv. L. Rev. 1108, 1109 (1984) (describing nonprobate assets). In doing so, States followed the lead of the Uniform Probate Code, a model statute amended in 1990 to include a provision revoking on divorce not just testamentary bequests but also beneficiary designations to a former spouse. See §§ 2–804(a)(1), (b)(1), 8 U.L.A. 330, 330–331 (2013). The new section, the drafters wrote, aimed to "unify the law of probate and nonprobate transfers." § 2–804, Comment, id ., at 333. The underlying idea was that the typical decedent would no more want his former spouse to benefit from his pension plan or life insurance than to inherit under his will. A wealth transfer was a wealth transfer—and a former spouse (as compared with, say, a current spouse or child) was not likely to be its desired recipient. So a decedent's failure to change his beneficiary probably resulted from "inattention," not "intention." Statement of the Joint Editorial Bd. for Uniform Probate Code, 17 Am. College Trust & Est. Counsel 184 (1991). Agreeing with that assumption, 26 States have by now adopted revocation-on-divorce laws substantially similar to the Code's.1 Minnesota is one.

Under prior Minnesota law, a divorce alone did not affect a beneficiary designation—but a particular divorce decree could do so. Take first the simple case: Joe names his wife Ann as beneficiary of his insurance policy, later gets divorced, but never changes the designation. Upon his death, Ann would receive the insurance proceeds—even if Joe had just forgotten to redirect the money. In other words, the insurance contract's beneficiary provision would govern after the divorce, exactly as it would have before. See Larsen v. Northwestern Nat. Life Ins. Co., 463 N.W.2d 777, 779 (Minn.App.1990). But now introduce a complication, in the form of a court addressing a spousal designation in a divorce decree. In Minnesota, as across the nation, divorce courts have always had "broad discretion in dividing property upon dissolution of a marriage." Maurer v. Maurer, 623 N.W.2d 604, 606 (Minn.2001) ; see 24 Am.Jur.2d, Divorce and Separation § 456 (2008). In exercising that power, a court could revoke a beneficiary designation to a soon-to-be ex-spouse; or conversely, a court could mandate that the old designation remain. See, e.g., Paul v. Paul, 410 N.W.2d 329, 330 (Minn.App.1987) ; O'Brien v. O'Brien, 343 N.W.2d 850, 853 (Minn.1984). Either way, the court, rather than the insured, would decide whether the ex-spouse would stay the beneficiary.

In contrast to the old law, Minnesota's new revocation-on-divorce statute starts from another baseline: the cancellation, rather than continuation, of a beneficiary designation. Enacted in 2002 to track the Code, the law provides that "the dissolution or annulment of a marriage revokes any revocable [ ] disposition, beneficiary designation, or appointment of property made by an individual to the individual's former spouse in a governing instrument." Minn. Stat. § 524.2–804, subd. 1. The term "governing instrument" is defined to include an "insurance or annuity policy," along with a will and other will substitutes. § 524.1–201. So now when Joe and Ann divorce, the clause naming Ann as Joe's insurance beneficiary is automatically revoked. If nothing else occurs before Joe's death, his insurance proceeds go to any contingent beneficiary named in the policy (perhaps his daughter Emma) or, failing that, to his estate. See § 524.2–804, subd. 2.

Something else, however, may well happen. As under Minnesota's former law, a divorce decree may alter the natural state of things. So in our example, the court could direct that Ann remain as Joe's insurance beneficiary, despite the normal revocation rule. See § 524.2–804, subd. 1 (providing that a "court order" trumps the rule). And just as important, the policyholder himself may step in to override the revocation. Joe, for example, could agree to a marital settlement ensuring Ann's continued status as his beneficiary. See ibid. (providing that such an agreement controls). Or else, and more simply, he could notify his insurance company at any time that he wishes to restore Ann to that position.

But enough of our hypothetical divorcees: It is time they give way to Mark Sveen and Kaye Melin, whose marriage and divorce led to this case. In 1997, Sveen and Melin wed. The next year, Sveen purchased a life insurance policy. He named Melin as the primary beneficiary, while designating his two children from a prior marriage, Ashley and Antone Sveen, as the contingent beneficiaries. The Sveen–Melin marriage ended in 2007. The divorce decree made no mention of the insurance policy. And Sveen took no action, then or later, to revise his beneficiary designations. In 2011, he passed away.

In this action, petitioners the Sveen children and respondent Melin make competing claims to the insurance proceeds. The Sveens contend that under Minnesota's revocation-on-divorce law, their father's divorce canceled Melin's beneficiary designation and left the two of them as the rightful recipients. Melin notes in reply that the Minnesota law did not yet exist when her former husband bought his insurance policy and named her as the primary beneficiary. And she argues that applying the later-enacted law to the policy would violate the Constitution's Contracts Clause, which prohibits any state "Law impairing the Obligation of Contracts." Art. I, § 10, cl. 1.

The District Court rejected Melin's argument and awarded the insurance money to the Sveens. See Civ. No. 14–5015, 2016 WL 9000457 (D.Minn., Jan. 7, 2016), App. to Pet. for Cert. 9a–16a. But the Court of Appeals for the Eighth Circuit reversed. It held that a "revocation-upon-divorce statute like [Minnesota's] violates the Contract Clause when applied retroactively." 853 F.3d 410, 412 (2017).

We granted certiorari, 583 U.S. ––––, 138 S.Ct. 542, 199 L.Ed.2d 422 (2017), to resolve a split of authority over whether the Contracts Clause prevents a revocation-on-divorce law from applying to a pre-existing agreement's beneficiary designation.2 We now reverse the decision...

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