Reliance Life Insurance v. Jaffe

MOORE, P. J.

David and Gertrude Gandin had two minor daughters, to wit: Leslie S. and Peggy Dee. In contemplation of divorce, the parents by a writing entered into an agreement for a property settlement. By that document they agreed that a life insurance policy in David’s name “is to be maintained by the husband”; the beneficiaries to be Leslie and Peggy Dee, “share and share alike, or to the survivor of them.” Prior to his death David executed a change of beneficiary whereby he directed that the proceeds of the policy be placed in two equal trusts with each daughter a beneficiary and his sister, Rose Gandin Jaffe, the trustee of both trusts, each trust to terminate upon the beneficiary’s attaining the age of 21 years.

Following the death of David, Rose Jaffe as trustee, and Gertrude Dobreer as potential guardian of the persons and estates of the minor children, filed claims with the insurance company after which it filed its complaint in interpleader to determine who is entitled to the possession of the proceeds of the policy. The trial court awarded the proceeds to Rose Jaffe as trustee as directed by the trustor in his “change of beneficiary.” The minor children through their mother Gertrude Dobreer as guardian

ad litem

appeal from the judgment, contending that the change of beneficiary creating the trusts was contrary to the terms of the property settlement.

The interest of a beneficiary in a policy which authorizes an alteration of its terms is not ordinarily a vested right. On the contrary, it is a mere expectance of an inchoate gift which may be consummated upon the death of the insured. However, it is revocable at the option of the insured during his lifetime.

(Mutual Life Ins. Co.

v.

Franck,

9 Cal.App.2d 528, 537 [50 P.2d 480].) But the latter may waive his right

to

change the beneficiary and by contract he may convert the contingent interest into a vested equitable interest in the policy which may not be subsequently defeated by an effort to change the beneficiary.

(Chilwell

v.

Chilwell,

40 Cal.