This case surrounds a dispute over decedent Stephanie Boyter Kreppein’s insurance proceeds between the decedent’s ex-husband, Alfred Kreppein (“Mr. Kreppein”), and the decedent’s children, Ryan Brice Crane and Laurel Crane Luquette (“Crane” and ‘‘Luquette’’).
The decedent and Mr. Kreppein were married in November, 2000.
Subsequently, each of them purchased a life insurance policy naming the other as the sole beneficiary. Mrs. Kreppein named Crane and Luquette as Contingent Beneficiaries of her policy. On July 28, 2005, the decedent moved out of her home with Mr. Kreppein to Baton Rouge with members of her family. On August 2, 2005, Mr. Kreppein filed a petition for divorce from the decedent. Subsequently, on August 29, 2005, First Colony received a Policy Change Form, signed by Mrs. Kreppein, revoking all prior beneficiary designations and designating Crane and Luquette as the Primary Beneficiaries under the Policy. Mrs. Kreppein died on October 11, 2005.
Under the applicable policy, upon the death of the insured, First Colony became obligated to pay the sum of $500,000, plus applicable interest, to the person/s rightfully entitled to the death benefit. On December 27, 2005, Plaintiff First Colony Life Insurance Company (‘‘First Colony’’) filed a Complaint for Interpleader to determine the rightful beneficiary/ beneficiaries of the insurance proceeds.

II. Contractual Capacity Mr. Kreppein suggests that the decedent lacked the required contractual capacity at the time that she changed the beneficiary of her life insurance policy. His affidavit states that ‘‘she was unable to perform routine tasks,’’
‘‘she began to lose her ability to think,’’ and ‘‘she could not remember people she had known for long periods of time.’’ The affidavit of the insurance agent who procured the policies for the Kreppeins states that on July 29, 2005, the decedent, her mother and another woman came to see him about changing the beneficiary on the insurance policy. The agent, Terry Sullivan states ‘‘[a]t the time, it was clear that Stephanie was not able to understand or comprehend what was going on. . . . She smiled sweetly but did not recognize me or seem to comprehend anything that I said.’’
However, the decedent was not interdicted by law at the time of her death, and it is well settled that the law presumes contractual capacity.
Exceptions to the presumption of capacity to contract must be shown quite convincingly and by the great weight of the evidence. Therefore, to determine whether the change of beneficiary should be nullified due to lack of contractual capacity, the Court looks to Louisiana Civil Code Article 1926:
A contract made by a noninterdicted person deprived of reason at the time of contracting may be attacked after his death, on the ground of incapacity, only when the contract is gratuitous, or it evidences lack of understanding, or was made within thirty days of his death, or when application for interdiction was filed before his death.
The changing of a beneficiary under a life insurance policy is not a gratuitous contract; there was no application for interdiction filed before the decedent’s death; and the Change of Beneficiary Form signed by the deceased was executed on August 22, 2005, more than thirty days before the decedent’s death.
Therefore, the only way that the decedent’s Change of Beneficiary Form can be challenged for lack of capacity is if it ‘‘evidences a lack of understanding.’’ There is no evidence that the contract itself ‘‘evidences a lack of understanding.’’ The Policy Change Form bears the decedent’s signature and clearly sets forth a change of beneficiary from Mr. Kreppein to a 50% interest in Ryan Crane and a 50% interest in Laurel Crane Luquette.
Furthermore, the sworn affidavit of Mary Elizabeth Perry, who witnessed the signing of the document notes that the decedent ‘‘made it clear it was something she wanted to do. She expressed understanding concerning the implications of signing the Change of Beneficiary Designation Form.’’ As such, there is insufficient evidence to overcome the presumption that the decedent had contractual capacity at the time she executed the Policy Change Form document.

III. Reciprocal Insurance Obligation Mr. Kreppein argues that even if the decedent did not lack contractual capacity to change the insurance policy beneficiary, she was precluded from doing so because she and Mr. Kreppein had mutually contracted away their rights to change the beneficiary of their respective policies. Mr. Kreppein states in his affidavit: ‘‘Stephanie and I had specifically agreed to secure two insurance policies on each other’s lives to enable us to pay debts which we were continuing to incur as a result of business and other property we purchased during our marriage.’’ The two allegedly agreed that the proceeds of the respective policies would reciprocally ensure each other and there would be ‘‘no change regarding the insurance policies or beneficiaries.’’
The only evidence that Mr. Kreppein has to attest to this seemingly oral agreement to reciprocally insure was Mr. Kreppein’s own affidavit and that of Terry Sullivan, the agent who helped the Kreppeins procure their policies.
Terry Sullivan states in his depositions: ‘‘He was aware that I had an insurance license and he indicated that he and Stephanie wanted to discuss obtaining life insurance policies that would protect each of them in the event of the death of the other.’’
The decedent’s insurance policy states that the ‘‘Owner may change the designations of Owner, Contingent Owner, and Beneficiary during the insured’s lifetime. Any change is subject to the consent of an irrevocable beneficiary.’’ There is no indication in the policy nor any argument made by either party that Mr. Kreppein was made an ‘‘irrevocable beneficiary’’ under the policy. Without a designation of an irrevocable beneficiary, the decedent would be free to change the beneficiary under the policy at any time before his or her death. If the Kreppeins had truly intended to contract out of their right to change the designation of beneficiary, each should have designated the other as ‘‘irrevocable beneficiary’’ under the policy. If they had done so, any change to the policy beneficiary could only be made with the irrevocable beneficiary’s consent.
It is well settled in Louisiana law that the owner of an insurance policy, usually also the insured, has the right to change the designation of the beneficiary of his or her policy under the terms of the policy without the consent of the original beneficiary. This is because absent a conventional agreement, ‘‘no one has the vested right to the status of a beneficiary under a life insurance contract, if the contingent event which vests such right, the death of the insured, has not occurred; until then, the parties to the insurance contract are free to change the beneficiary, if such a change is permitted by its terms.’’
Such a case is present here. Mr. Kreppein has adduced no evidence that the deceased sought to designate him as an irrevocable beneficiary.
Furthermore, he has failed to introduce any evidence, other than his own testimony and the generalized testimony of his insurance agent, Terry Sullivan, that the deceased intended to enter into a binding conventional obligation to maintain Mr. Kreppein as the beneficiary of her policy.

Questions

1. What does the court mean when it says that the decedent was not interdicted?
2. What evidence would you try to present to indicate a person’s contractual capacity?
3. What would be the consideration for a reciprocal insurance obligation?