A Killer Cannot Receive the Life Insurance Money

Understanding the Texas Slayer Statute

Public policy obviously does not reward unjustified killing.  What happens to the life insurance proceeds if the beneficiary is a murderer? Fortunately, Texas has a law that addresses this issue. The Texas Slayer Statute, also known as the Slayer Rule, prohibits a killer from receiving benefits from life insurance proceeds. If the rule is an issue in a life insurance beneficiary interpleader, it is important to understand what the Texas Slayer Statute is, who is considered a slayer, what happens to insurance proceeds under the Slayer Rule, and how the Slayer Rule is enforced in Texas.

What is the Texas Slayer Statute?

Texas Slayer Statute Overview

The Texas Slayer Statute, Section 1103.151 of the Texas Insurance Code, further sets out conditions under which the Slayer Rule applies to life insurance policies and contracts. Generally, if the beneficiary of a life insurance policy or contract is convicted of being an accomplice in willfully bringing about the death of the insured, the policy or contract forfeits. The Slayer Rule also applies if the beneficiary of a life insurance policy or contract is found by a preponderance of the evidence to have intentionally caused or participated in bringing about the insured's death.

How Does the Slayer Rule Affect Life Insurance?

The Slayer Rule applies to any person who is designated as the beneficiary of a life insurance policy or contract, whether primary or contingent. If the Slayer Rule applies, the life insurance policy or contract is forfeited, and the proceeds go to the next eligible beneficiary. If there is no other beneficiary named in the policy, the insurance proceeds will be distributed according to the provisions of the Texas Estates Code that apply when a person dies intestate, or without a will.  Federal courts will also apply the slayer statute concepts to ERISA life insurance policies. 

Who is Considered a Slayer?

What Constitutes Bringing About Death?

The Slayer Rule applies to anyone who brings about the death of the insured, whether directly or indirectly. For example, if someone hires a hitman to kill their spouse, that person would be considered a slayer, even if they did not physically kill their spouse. However, mere negligence, including gross negligence may not be sufficient to prevent the beneficiary from receiving the proceeds of the policy.   Texas Courts will be more reluctant to disqualify the beneficiary if there is not evidence of intent.  However, the establishment of a culpable mental state is commonly done by use of circumstantial evidence.

Can an Accomplice Be Considered a Slayer?

Yes, an accomplice in willfully bringing about the death of the insured can also be considered a slayer under the Slayer Rule. In this case, if the insurer can prove that the beneficiary acted as an accomplice, the life insurance policy or contract will forfeit.

What if the Slayer is Found Not Guilty?

Even if a slayer is found not guilty of the crime, they can still be prohibited from receiving life insurance proceeds under the Slayer Rule. This is because the Slayer Rule only requires a preponderance of the evidence, which is a lower evidentiary standard than the beyond-a-reasonable-doubt standard required for a criminal conviction.

What Happens to Insurance Proceeds Under the Slayer Rule?

Life Insurance Policy/Contract Forfeits if Beneficiary is a Slayer

Under the Slayer Rule, if the beneficiary of a life insurance policy or contract is a slayer, the policy or contract is forfeited. This means that the slayer will not receive any life insurance proceeds, even if they were named as the primary beneficiary.  In that circumstance, the money will go to the contingent beneficiary or to the estate of the insured. 

Does the Slayer Rule Apply to All Insurance Policies?

No, the Slayer Rule only applies to life insurance policies and contracts. It does not apply to other types of insurance, such as auto or homeowners insurance.

What Happens to Insurance Proceeds if There is No Beneficiary?

If there is no beneficiary named in the life insurance policy or contract, the insurance proceeds will be distributed according to the provisions of the Texas Estates Code. This means that the proceeds will go to the deceased person's heirs, as determined by Texas probate law.

What is a Constructive Trust?

If the Slayer Rule applies, a constructive trust may be imposed on the life insurance proceeds or any other assets that the slayer would have received from the victim's estate. A constructive trust is a court-supervised trust that's created to hold assets for the benefit of someone who has been wrongfully deprived of them.

What is the Role of Probate in the Slayer Rule?

Probate court is responsible for determining whether the Slayer Rule applies and setting up a constructive trust if necessary. Probate court is also responsible for administering the estate of the deceased person and ensuring that the assets are distributed appropriately.

How is the Slayer Rule Enforced in Texas?

Relevance of Texas Law and Insurance Code

The Slayer Rule is enforced in Texas through the Texas Insurance Code and the Texas Estates Code. These laws set out the conditions under which the Slayer Rule applies to life insurance policies and contracts and to inheritances.

What Happens in a Trial Court?

If the insurer believes that the Slayer Rule applies, they can file a declaratory judgment action in a Texas trial court to determine whether the beneficiary is a slayer. The burden of proof is on the insurer to show that the beneficiary is a slayer by a preponderance of the evidence.

Penalties for Willfully Violating Slayer Rule

If a beneficiary of a life insurance policy or contract is convicted of willfully causing the death of the insured, the conviction shall work corruption of blood and result in a forfeiture of the beneficiary's interest in the estate of the insured, including any life insurance proceeds.

Conclusion

Importance of Complying with the Slayer Rule

The Slayer Rule is an important protection that ensures that a person who intentionally causes the death of another cannot benefit from that person's estate. It is important for insurers and estate planners to be aware of the Slayer Rule and take steps to ensure compliance.

What to Do if You Suspect a Beneficiary is a Slayer?

If you suspect that a beneficiary may be a slayer, or if you are wrongfully accused of being a slayer, you should contact a Texas attorney familiar with the Slayer Rule. Call (800) 323-1857 and ask for attorney J. Michael Young