“Simultaneous Death” Laws In Conflict For Insurance Payout


Sometimes when the legislature adopts a new statute, no one notices that it conflicts with an existing law. While those conflicts usually get discovered and resolved, they can sometimes create real confusion in real cases.

Consider the tragic case of the Craig family. William and Diane Craig and Micah, William’s son from a former marriage, were all killed in a head-on automobile collision near Prescott, Arizona, in 1999. An off-duty police officer witnessed the crash and tried to assist, but without success.

When the police officer first approached the Craigs’ vehicle he heard moans coming from Diane Craig. He quickly determined that both William and Micah Craig were dead; ten minutes later it was clear that Diane Craig had died.

William had two life insurance policies, totaling almost $700,000 in benefits. Both policies named his wife Diane as beneficiary and neither named an alternate. In the event that his first beneficiary did not survive him both policies provided that the proceeds would go to his daughter from the former marriage, Chanda Craig.

Arizona, like many states, has adopted a provision of the Uniform Probate Code to avoid problems just like the one facing the insurance companies in the Craig case. The Arizona law requires a life insurance beneficiary (and indeed any heir) to live at least five days longer than the decedent in order to collect benefits. Mrs. Craig lived no more than a few minutes longer than her husband.

Mrs. Craig’s heirs, however, pointed out an anomaly in Arizona law. Although the Uniform Probate Code provision was adopted in 1974, and later amended to cover a wide variety of non-probate situations (including insurance contracts), no one in the legislature ever noticed or bothered to repeal the prior law dating back to 1954. That earlier version would have required Chanda Craig to show that there was no sufficient evidence that her step-mother died before her father.

The insurance companies filed suit in federal court, asking the judge to direct them as to who should receive the insurance benefits. The federal judge requested the Arizona Supreme Court to determine which law applied to the Craig family tragedy.

The Arizona Supreme Court decided that the legislature had simply overlooked the earlier statute when the Uniform Probate Code was adopted, and again each time it was amended thereafter. The Justices declined to attach any importance to the fact that the newer version appears in the Probate Code, while the unchanged original law is found in the Insurance Code; the titles of the respective sections did not demonstrate any particular intent on the legislature’s part. The result: Chanda Craig received the proceeds from her father’s life insurance. Unum Life Insurance Co. v. Craig, July 17, 2001.

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