Citation Nr: 0001992 Decision Date: 01/27/00 Archive Date: 02/02/00 DOCKET NO. 96-48 988A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Whether the appellant may be recognized as the beneficiary of the veteran's National Service Life Insurance policy, [redacted] [redacted], in the face amount of $10,000. This is a contested claim. REPRESENTATION Appellant represented by: Robert M. Brake, Attorney [redacted], Appellee, represented by: Sharon R. Long, Attorney WITNESSES AT HEARINGS ON APPEAL The appellant, and [redacted] ATTORNEY FOR THE BOARD Neil Reiter, Counsel INTRODUCTION The veteran, who served on active duty from October 1940 to November 1945 and October 1951 to October 1966, died on June [redacted], 1995. At the time of his death, the veteran had a National Service Life Insurance (NSLI) policy (RH) in force in the face amount of $10,000. The agency of original jurisdiction (AOJ) determined that a March 1995 designation of beneficiary form naming [redacted], the appellant, as the sole principal beneficiary of the NSLI policy, was not valid. The AOJ determined that the last valid beneficiary designation of record for this policy was dated in late January 1988 in which [redacted], the present appellee, was named beneficiary for one-half of the insurance proceeds. [redacted] was named as beneficiary for one-quarter of the proceeds, and [redacted] was named as beneficiary of the remaining one-quarter of the insurance proceeds. [redacted] appeared and testified at a hearing before the Board sitting at St. Petersburg, Florida, in September 1997. Thereafter, the Board remanded the case for various due process considerations, including notification to [redacted] of her right to representation and to appear at a hearing. In June 1999, [redacted] testified at a hearing before the Board sitting at Milwaukee, Wisconsin. It is noted that [redacted] and [redacted] have not submitted claims for the insurance proceeds. At her hearing, [redacted] indicated that she was not contesting the validity of the January 1988 beneficiary designation, indicating that she believed that she was entitled to one-half of the proceeds of the insurance policy as a result of the January 1988 beneficiary designation. The appellant, [redacted], on appeal and at her hearing, relied solely on the validity of the March 1995 beneficiary designation. She did not contest the validity of the January 1988 beneficiary designation. Since [redacted] and [redacted] have not submitted claims for the insurance policy, the Board has limited the present appeal to the question of whether the appellant may be recognized as the beneficiary of the veteran's NSLI policy. FINDINGS OF FACT 1. At the time of his death, the veteran had a $10,000 NSLI (RH) policy in force. 2. In late January 1988, he designated [redacted] as a principal beneficiary to receive one-half of the proceeds of this policy, and [redacted] and [redacted] to each receive one-quarter of the proceeds of the policy. 3. This was the last valid beneficiary designation signed by the veteran during his lifetime. 4. In March 1995, the appellant, [redacted], submitted a change of beneficiary form designating her as the sole principal beneficiary on this insurance policy. 5. The appellant signed the veteran's name on this beneficiary designation, indicating that she was signing the beneficiary form pursuant to a power of attorney. 6. The veteran did not sign the beneficiary form dated in March 1995. 7. The present record does not demonstrate that the veteran took affirmative action which would evidence his intent to change the beneficiary or beneficiaries of his NSLI policy from the beneficiaries named in January 1988 to the appellant. CONCLUSION OF LAW The appellant is not the last-named beneficiary of the veteran's NSLI (RH) policy in the face amount of $10,000, and thus, she is not entitled to the proceeds of such policy. 38 U.S.C.A. § 1917 (West 1991); 38 C.F.R. § 8.22 (1998). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Background The veteran applied for and obtained a NSLI (RH) policy in the face amount of $10,000 in 1979. On his initial application for such insurance, he named [redacted], his wife, as the sole principal beneficiary of this policy. In September 1980, he signed a change of beneficiary form designating [redacted] as the sole principal beneficiary of the policy. In January 1982, he signed another beneficiary designation, naming [redacted] as the sole principal beneficiary of his policy, and [redacted] as the contingent beneficiary. In February 1982, a letter was received from [redacted]'s attorney indicating that [redacted] was in receipt of a change of beneficiary form signed by the veteran designating [redacted] as the principal beneficiary of his National Service Life Insurance policy. The attorney indicated that the veteran abused alcohol, that the proposed beneficiary was no relation to the veteran, and that [redacted] would contest payment of the proceeds of the policy to any other beneficiary than herself. In June 1982, the veteran was granted a waiver of premiums on his insurance policy. In August 1982, the veteran wrote to the agency of original jurisdiction requesting that no further change of beneficiary be accepted unless his signature was witnessed by a notary public. In August 1987, the veteran signed a change of beneficiary form, designating [redacted] as the beneficiary of one-half of the proceeds of his NSLI policy. He designated [redacted], a daughter, to receive one-quarter of the proceeds, and [redacted], to receive the other quarter of the proceeds of the policy. In January 1988, the veteran again signed a change of beneficiary form, designating [redacted] as principal beneficiary for one-half of the proceeds of the policy, and designating [redacted] and [redacted] as beneficiaries for one- quarter of the proceeds of the policy. In January 1994, the veteran signed an application for Supplemental (RH) Life Insurance in the amount of $20,000. This application was for an additional $20, 000 RH insurance policy, separate and apart from his existing $10,000 policy. He named [redacted] as the principal beneficiary on this application. It is noted that he signed the application form, and that he listed the proper insurance file number. He did not list the policy number, [redacted], on this form. Later in January 1994, the AOJ informed the veteran that his application for Supplemental Life Insurance (RH) had not been approved. In March 1995, the AOJ received a change of beneficiary form, naming [redacted] as the sole principal beneficiary of the veteran's NSLI policy, [redacted]. In the signature box for the insured, there was a signature of the veteran, with [redacted]'s name and the designation "POA." The form was witnessed by Susan Childers. After the veteran's death, claims for the proceeds of the veteran's NSLI policy were received from [redacted] and [redacted]. A copy of the insurance contract was also received. The AOJ sent letters to [redacted] and Susan Childers requesting information concerning whether the veteran had signed the beneficiary designation dated in March 1995. After several letters, [redacted] and the witness indicated that the veteran had not signed the beneficiary designation dated in March 1995. Susan Childers indicated that she was a notary public, that the veteran was not present at the time that the form was signed, and that [redacted] had indicated that she wanted to sign the form with a power of attorney. [redacted] confirmed these statements, indicating that she had been provided a power of attorney, which she submitted, dated in February 1995, because of the veteran's recent illness. She stated that the veteran had instructed her to draw up a change of beneficiary form naming her as sole principal beneficiary of the insurance policy, that she had drawn up this document, and that she then signed the veteran's name pursuant to the power of attorney. Subsequently, [redacted] submitted evidence showing that she had married the veteran in January 1942, that they were divorced in December 1946, and that they had remarried in December 1967. Evidence was also received indicating that [redacted] had been married to the veteran, and that their marriage ended in divorce in December 1967. [redacted] also provided a statement that she had paid [redacted], the veteran's daughter, $5,000 shortly before the veteran's death pursuant to the veteran's request that [redacted] receive some of the proceeds of the NSLI policy. She also submitted a copy of a Department of Veterans Affairs (VA) annual insurance policy statement sent to the veteran indicating that his last beneficiary designation of record was made in 1995. She further provided information that she had paid for the burial of the veteran. At a hearing before the Board sitting at St. Petersburg, Florida, [redacted] stated that the veteran was not present when she signed the veteran's name and her own on the beneficiary designation in 1995. She stated that she signed the beneficiary form because the veteran was terminally ill, and because his handwriting was poor. [redacted] testified that the veteran was concerned about whether there would be enough money for his burial and to care for her, and that he instructed her to change the beneficiary designation pursuant to her power of attorney. She reported that she had received $2,000 from an Air Force association insurance policy. Pursuant to the Board's remand in November 1998, the AOJ sent [redacted] a copy of the hearing transcript, and offered her an opportunity to testify at a hearing also. Thereafter, [redacted] testified at a hearing before the Board sitting at Milwaukee, Wisconsin, in June 1999. She testified that the veteran had indicated to her on different occasions that he wanted her to share the proceeds of his NSLI policy with the other two beneficiaries named on the beneficiary designation in January 1988. She also provided a statement indicating that [redacted] was willing to assign her share to her if the veteran so intended. It is noted that [redacted] was provided notice of this hearing and of her right to attend the hearing. Analysis Congress has provided that the veteran has the right to name any person as the beneficiary of his National Service Life Insurance policy, and he has the right, subject to certain regulatory criteria to, at any time, change the beneficiary without the consent or knowledge of the prior beneficiary. 38 U.S.C.A. § 1917. The regulatory criteria provide that a change of beneficiary, to be effective, must be in writing, signed by the insured, and forwarded to the VA by the insured's agent. The policy, a contract, also provides that a change of beneficiary, to be effective, must be signed by the insured. 38 C.F.R. § 8.22. In this case, the appellant has relied on the March 1995 change of beneficiary form to indicate that she is entitled to the proceeds of the veteran's NSLI policy in the face amount of $10,000. However, she and the witness to this form indicated that the veteran did not sign the form as required by the terms of the contract and by pertinent regulation. They have indicated that the appellant, [redacted], came to the notary public, and signed the form in the presence of the notary public. Specifically, [redacted] signed her own name, with the designation of power of attorney, and signed the veteran's name. However, a general power of attorney may not be used to change a National Service Life Insurance beneficiary, in view of the contract terms and regulatory criteria indicating that the veteran must sign the beneficiary designation. Of course, if the veteran is incompetent or physically or mentally incapable of signing a change of beneficiary form, then a guardian, duly appointed, may make such change. Murray v. U.S., 107 F. Supp. 290 (D.C. Mich. 1952). While [redacted] indicated that the veteran was terminally ill at the time of the beneficiary designation submitted in March 1995, there is no indication by her, or independent confirmation, that the veteran was incompetent in any way, or incapable of providing his signature on the form. She has not indicated that she was the veteran's duly appointed guardian. The March 1995 beneficiary designation was not signed by the veteran, and cannot be recognized for the purpose of designating [redacted] as the sole principal beneficiary on the veteran's NSLI policy. However, Federal courts have decided that the regulatory requirements are adopted for the benefit of the United States and are not for the protection of any particular beneficiary. Accordingly, it is held with respect to the regulations pertaining to a change of beneficiary that the courts will brush aside all legal technicalities in an effort to effectuate the manifest intent of the insured. United States v. Palmer, 238 F. 2d 431 (2nd Cir. 1956). The courts have held that an intent to change the beneficiary must be followed by positive action on the part of the insured evidencing an exercise of the right to change the beneficiary. Collins v. United States, 161 F. 2d 64 (10th Cir. 1947). It is the generally accepted rule that the burden of proof is upon the one who asserts a change of beneficiary to sustain such change by a preponderance of the evidence. Berk v. United States, 294 F. Supp. 578 (EVNY 1969). In this regard, Federal law controls the resolution of the question relating to the proper beneficiary of a veteran's NSLI policy, which are contracts between a veteran and the Federal Government. See Wisner v. Wisner, 338 U.S. 655 (1950). In this case, the appellant has not submitted any independent or contemporaneous evidence to demonstrate that the veteran affirmatively decided to change the 1988 beneficiary designation, or took affirmative action to make such change. [redacted] was named as the veteran's sole principle beneficiary on the veteran's application for additional insurance signed by him in January 1994. However, this application was rejected. Further, the veteran did not indicate that he desired to have [redacted] as the principal beneficiary of the existing policy, [redacted], on this form. This application does not demonstrate that the veteran intended to change the 1988 beneficiary designation (to name the appellant as the sole beneficiary on his existing NSLI policy), or took affirmative action to make such change. In addition, there is no independent source to indicate that the veteran, in fact, endorsed [redacted]'s attempt to change the beneficiary designation in 1995. The witness or notary public to the 1995 beneficiary form indicated that the veteran was not present at the signing of the form by [redacted], and that she could not testify as to the veteran's intent. There is no other disinterested witness or person of record that has indicated that the veteran desired to substitute [redacted] for the prior named beneficiaries. Thus, the present evidence of record does not demonstrate that the veteran unequivocally intended to change the beneficiary of his NSLI policy from the named beneficiaries in 1988 to the appellant, or did everything in his power to effectuate such change. Finally, the equity and fairness of the veteran's choice in naming a beneficiary are not part of the legal criteria or requirements upon which to decide who may be entitled to the proceeds of the insurance policy. Whether the appellant paid for the veteran's funeral is immaterial to the question of who is entitled to the proceeds of his NSLI policy. The proceeds of the policy are not subject to equitable or legal process or attachment. 38 U.S.C.A. § 5301 (West 1991). ORDER The appellant is not the last-named beneficiary of record, and is not entitled to any of the proceeds of the veteran's National Service Life Insurance policy. Accordingly, the appeal is denied. This decision constitutes the final administrative denial of the appellant's claim. CONSTANCE B. TOBIAS Member, Board of Veterans' Appeals ______________________________ ______________________________ LAWRENCE M. SULLIVAN ROBERT D. PHILIPP Member, Board of Veterans' Appeals Member, Board of Veterans' Appeals