Singleton v. Cheek

Background

Lee Ray Jackson was a U.S. Army soldier who received a life‑insurance certificate in 1918. He died in 1921, leaving a widow, Mary Lucinda Jackson (later Mary Lucinda Singleton), and an infant son who died in 1922. The widow died in 1923. Parts of the insurance (disability pay and commuted installments) were paid to various administrators and distributed under orders from the Veterans’ Bureau. Siblings of the soldier later contested who should receive the commuted unpaid installments.

Reasoning

The Court reviewed how federal law treated unpaid yearly renewable term insurance when a named beneficiary died before receiving all installments. Earlier statutes had limited payment to certain classes of beneficiaries, but the Act of March 4, 1925 changed §303 to direct that, in specified circumstances, the present value of unpaid installments be paid to “the estate of the insured,” retroactive to 1917. The Court held that this amendment made unpaid installments assets of the insured’s estate at the moment of his death, so the heirs entitled under state intestacy law as of that date take those assets. The Court therefore rejected the state supreme court’s later decision that had awarded the commuted installments to heirs in being at the beneficiary’s death.

Real world impact

The decision makes the estate of the insured the recipient of unpaid commuted installments when the beneficiary dies before full payment, with heirs fixed as of the insured’s death. That rule applies because Congress made the 1925 amendment retroactive, altering who receives such insurance money in cases like this.