In the Estate of Stephen T. Gallagher, the state Superior Court recently reversed a lower court decision which had ruled that a former domestic partner was not entitled to the life-insurance benefits of his former spouse because he was not able to prove he was designated as the beneficiary. The dispute largely centered on how electronic records of Gallagher’s life-insurance information had been stored, and how beneficiary designations were made electronically.

Stephan J. Gallagher began working for the University of Pennsylvania in 2003. Shortly before that time, the University of Pennsylvania contracted with Aetna to provide life-insurance coverage to its employees and, upon employment, Gallagher purchased two life-insurance policies through the Penn Health & Welfare Program. During this time, Aetna switched from a manual record keeping system to electronic record keeping and communications as a means of record management.

About Gallagher and Hallman

Gallagher and Hallman were in a relationship and began living together in early 2005. They purchased a house, on which they took out a mortgage, and moved in together. They also registered as same-sex partners in 2006, and Gallagher added Hallman as a dependant under his medical insurance. In 2009, they separated and Hallman moved out of their jointly shared home, but stayed in touch following the separation. Hallman often performed favors for Gallagher such as errand running and watching his dog while he went on business trips. In December, 2008, Gallagher removed Hallman as a dependant from medical-insurance policy, and also added his mother as his contingent life-insurance beneficiary under the plan. Gallagher died in 2011, and both Hallman and Gallagher’s brother filed death claims on the policy.

At the lower court level, the Philadelphia Court of Common Pleas Orphan’s Court Division awarded benefits to Gallagher’s estate on the basis that Hallman failed to provide sufficient evidence proving Gallagher named he had selected him to be the beneficiary of his life insurance policies. The court averred that Hallman presented only a series of screenshots of computer records kept by Aetna and Penn, which listed Hallman as beneficiary. Further, the Court also said there were inconsistencies in the screen shots and that Hallman’s name could have merely been put into the system by default when Gallagher made changes to his medical insurance policy. It was the court’s position that, because the Gallagher parties were the default beneficiaries under the language of the policy, they did not have to show that Gallagher designated them as beneficiaries.

The Apppeal

On appeal, Hallman contended that screenshots Penn provided of Aetna’s official records unequivocally indentified him as the primary beneficiary and also argued that a letter from Penn’s general counsel suggesting that he had been inadvertently designated a primary beneficiary was speculative. Furthermore, Hallman argued that Aetna and Penn’s records established that he was the primary beneficiary when Gallagher died.

As companies are beginning to use electronic records for things like life-insurance and other estate planning tools, discrepancies, as we’ve seen above, are becoming a common but complex issue. We advise all of our client’s to keep their own records, whether paper or electronic. If you or someone you know needs help in estate planning, please contact one of our experienced estate attorneys at Petrelli Law, P.C.