Maine's highest court rules that the standard for changing a beneficiary on an annuity is contractual, not testamentary, capacity. Estate of Marquis (Me., No. Han-02-660, May 12, 2003).
At the time of her death in July 2001, Agnes Marquis owned two MetLife annuities. Ms. Marquis had initially designated her estate as the beneficiary on both policies, but on November 10, 2000, she changed the beneficiaries to Daniel Pelletier, her grandnephew. In early February 2001, after seeing Ms. Marquis' behavior, mental capabilities, and physical condition deteriorate, three of her relatives petitioned the probate court for temporary guardianship and conservatorship. Ultimately, the three became permanent guardians and an independent attorney was named as conservator. The conservator subsequently concluded that Ms. Marquis' change of beneficiary designation was invalid on grounds of lack of capacity and requested that MetLife void the transaction and reinstate the estate as the proper beneficiary. MetLife requested a court order to do so, but Ms. Marquis died before the conservator could make the requisite filing.
Robert Marquis, personal representative of Ms. Marquis' estate, petitioned the court to void the change in beneficiaries. Mr. Pelletier opposed the petition. The court found Ms. Marquis lacked contractual capacity and ordered MetLife to deliver the annuity proceeds to the estate. The court also ordered the estate to pay Mr. Pelletier's reasonable attorney fees. Both sides appealed. Mr. Pelletier argued that the court applied the wrong legal standard in determining whether Ms. Marquis had capacity, maintaining that the testamentary capacity standard should apply. Mr. Marquis asserted that Mr. Pelletier was not entitled to attorney fees because the lawsuit became necessary only after Mr. Pelletier refused to surrender the annuity proceeds.
The Maine Supreme Judicial Court affirms. The court rules that an annuity is a contract, and thus when changing the beneficiary designation on an annuity policy a party must possess the mental capacity necessary for executing a valid contract, not that required to execute or amend a will. The court also rules that the estate should pay Mr. Pelletier's attorney fees, finding that his action helped the court to determine whether the change in beneficiary was the product of undue influence or lack of capacity.
For the full text of this decision, go to: https://www.courts.state.me.us/opinions_orders/opinions/2003_documents/03me71ma.pdf
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