In re the Estate of Jaccoma
Aрpeal from an order of the Surrogate’s Court of Columbia County (Zittell, S„), entered November 4, 1987, which granted petitioners’ applicatiоn to direct respondent to pay the proceeds of decedent’s employee benefits to petitioners.
Decedent was an employee of Chase Manhattan Bank at the
Chase Manhattan Bank notified respondent that she was the sole beneficiary of decedent’s life insurance policy and a cobeneficiary of decedent’s thrift incentive plan and paid the appropriate portions thereof to her in 1986. It also paid one half of the thrift incentive plan to Edward H. Jaccoma, as a named beneficiary. It is alleged that Edward H. Jaсcoma distributed this money to petitioners in order to effectuate decedent’s intent as reflected in her will. Petitioners asked resрondent to similarly distribute the proceeds of the life insurance policy and her one half of the proceeds of the thrift incentivе plan to them. She declined and this proceeding was commenced by petitioners to compel respondent, as exeсutrix, to turn the funds over to them in alleged compliance with the will. Surrogate’s Court rejected respondent’s procedural objectiоns to the proceeding and, reaching the merits, ruled in favor of petitioners, determining that "[w]hen the insurer or custodian of a corpоrate investment plan can be protected from the peril of multiple payments of the same claims and all of the partiеs are before the court, the clear and unambiguous language of a bequest of insurance and investment proceeds should be givеn effect over designations made years before the will was made”. Accordingly, Surrogate’s Court ordered respondent to pay thе proceeds of the life insurance policy and thrift incentive plan to petitioners "in accordance with the provisions of paragraph eighth of the will, together with interest”. This appeal ensued.
The central question before us is whether decedent cоuld change the beneficiary of her life insurance policy and thrift incentive plan by language in her will when Chase Manhattan
The analysis must begin with the presumption that "[a]s long as the proceeds of a life insurance policy are paid to a named beneficiary * * * the decеdent cannot transfer proceeds by will” (7 Warren’s Heaton, Surrogates’ Courts § 10, at 4-55—4-56 [6th ed]). The reason for this rule is that designation of the beneficiary of the policy is a matter of contract between the employer and its employee. As part of the bargain, the emрloyee agrees to change the beneficiary only pursuant to the procedures outlined in the policy, and these proсedures generally will either expressly prohibit a change in beneficiary by testamentary disposition or impliedly prevent such mode оf change by setting forth conditions to effect the change which cannot be met by a statement in a will (see, 7 Warren’s Heaton, Surrogates’ Courts § 9, at 4-21—4-22 [6th ed]; see also, Kane v Union Mut. Life Ins. Co.,
In this case, the employer had a clearly stated procedure for changing the beneficiary of its life insurance benefits: "The Employee may change the beneficiary from time to time by written request filed with the Employer, but any such change shall take effect only upon its entry by the Employer on the insurance records maintained by the Employer”. Although the record is not entirely clear, the thrift incentive plan appears to have had a similar requirement. On the "change of beneficiary” form that decedent used to name respondent and Edward H. Jaccoma as bеneficiaries appears the printed clause, "I [employee] reserve the right to designate a new Beneficiary in substitution for the Beneficiary named above by filing the proper form with the Compensations Operations Department”.
Since Chase Manhattan Bank was given no notice of the purported change of beneficiary to petitioners, the will clearly did not conform with the bank’s written procedures. This being the case, the next inquiry is whether the bank waived its right to insist that decedent change her beneficiaries according to its written procedures. Courts have found an employer to have waived this right when it becomes a stakeholder, depositing the proсeeds of the policy or fund into court and allowing the claimants to settle their dispute among themselves (see, Kane v Union Mut. Life Ins. Co., supra, at
In our view, the uncontroverted evidence before Surrogate’s Court compelled a finding that Chase Manhattan Bank had a written procedure regarding change of beneficiary designations, that it was entitled to and did require strict conformity therewith and that it did not waive that right by taking on the role of a stakeholder. Since these funds were not part of the probate estate, respondent did not violate her responsibility to the beneficiaries named in the will. This determination renders academic consideration of the claim that the petition was procedurally defective.
Order reversed, on the law, without costs, and petition dismissed. Kane, J. P., Mikoll, Yesawich, Jr., Harvey and Mercure, JJ., concur.