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Life Health > Life Insurance

Life Insurer Asks Court to Free It From Sausage Maker's Estate

By Allison Bell

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A new suit may give estate planners ideas about how to prepare for the possibility that a business owner client will sell the business.

ReliaStar Life Insurance Co. has started an interpleader action against the widow of Eugene Fontanini, the former president of Capitol Wholesale Meats, a sausage maker that was acquired by Hormel for $425 million in 2017.

Eugene Fontanini bought a $5 million term life policy from ReliaStar in 2010. He died of hemorrhagic pulmonary edema in 2023 at 71.

ReliaStar told the U.S. District Court in Chicago in a complaint filed June 26 that it’s not sure how to distribute the policy proceeds. It wants to deposit the benefits with the court.

The defendants are Capitol Wholesale Meats; Eugene Fontanini’s widow, JoAnne Fontanini, as the personal representative of her husband’s estate; and the JoAnne Fontanini Irrevocable Grantor Trust.

Representatives for ReliaStar and JoAnne Fontanini could not immediately be reached for comment.

Capitol Wholesale Meats: Oriano and Jennie Fontanini, immigrants from Lucca, Italy, started the meat company in Chicago in 1960.

The company sold meatballs and sausages to Italian restaurants throughout the Chicago area. It moved into a 188,000-square-foot plant in McCook, Illinois, in 2008.

When Hormel bought Capitol Wholesale, the estate of Eugene Fontanini had a 4.91% stake in the company; the estate of his wife had a 4.91% stake; the Eugene Fontanini Irrevocable Grantor Trust had a 25.5% stake; the JoAnne Fontanini Irrevocable Grantor Trust had a 23.5% stake; and a Descendants Trust Created Under the Jennie Fontanini Irrevocable Grantor Trust had a 41.18% stake.

ReliaStar’s concerns: After Eugene Fontanini died, JoAnne Fontanini asked ReliaStar to distribute the term life benefits based on the stake each shareholder held in the company in 2017.

ReliaStar said it never received a request to change the owner or beneficiary of the policy before Eugene Fontanini died.

Even if the distribution of the company assets in 2017 affected the ownership of the term life policy, “ReliaStar is unable to determine the effect this distribution of ownership had, if any, on the beneficiaries of the Policy,” the insurer said.

Credit: Zodiacphoto/Shutterstock

Allison Bell

Think_Allison

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