Life Insurance Beneficiary Disputes
As you move through life, it constantly changes and evolves. People leave our lives, others enter it, children are born, marriages take place. You do your best to keep up with these changes, but sometimes it doesn’t happen. It’s easy to forget about the necessary changes you need to make to a life insurance policy when life changes. After all, we hope there will still be “plenty of time” to get around to it. But this doesn’t always happen, and sometimes an individual or even an entire family is shocked when a loved one passes away, and they discover that, despite being told that they were the beneficiaries of a life insurance policy, the individual who passed away never got around to doing the paperwork. Or they may discover that the person made unexpected changes to the policy. Life insurance beneficiary disputes are the natural result of these kinds of unpleasant surprises. Read Can a spouse override a beneficiary
Stages of Life Insurance Beneficiary Disputes
In many cases, the first step in a beneficiary dispute is the filing of a life insurance interpleader action. When an insurance company has received more than one claim on the insurance policy proceeds, it will file an interpleader asking that the courts decide who is the rightful beneficiary. Each involved individual then has to present their case to the court as to why they are the legitimate beneficiary. Sometimes the parties involved are ordered to arbitration or mediation to try and work out a way to divide the proceeds of the life insurance that is acceptable for all parties. If this doesn’t work, the next step is a court case, which can quickly become expensive. The final resolution can take weeks, months or even years before any money is released by the insurer.
In either case, if you are one of the possible beneficiaries, it’s best to have an experienced life insurance lawyer represent you in arbitration or court proceedings. A life insurance attorney is familiar with the legalities of life insurance policies, the federal and state laws surrounding them, and what would best prove your case. It will save you time, money and aggravation if you have an attorney represent your interests.
Determining Valid Life Insurance Beneficiary Disputes
There are a variety of reasons for a beneficiary dispute when someone dies. He may have originally designated his children as beneficiaries, then remarried and changed the beneficiary to his new wife. There might be a stipulation for coverage in a divorce decree that was ignored. The list of possibilities is extensive, but not all-inclusive. Saying that someone promised to leave you money, without some proof if the individual’s intent, may not be enough. Consulting with an attorney specializing in life insurance beneficiary disputes is crucial. The lawyer can determine the merits of your case and how to proceed to get you the best settlement possible.
Types of Life Insurance Beneficiary Disputes
There are a number of reasons for disputing the beneficiary of a life insurance policy. Not all of them are valid in every state, but there are a few relatively common reasons for a dispute, including:
- A last-minute change in the beneficiary
- A beneficiary change that may have been coerced or forged
- No beneficiary listed in the policy by name
- A dispute between current and former spouses
- Children who should receive life insurance due to a court order but who aren’t mentioned in the policy
- More than one beneficiary disputing how the proceeds are distributed
- A beneficiary contributed to the death of the insured individual
- Change of beneficiary wasn’t executed properly
- The amounts designated for various beneficiaries do not add up to the value of the policy
- Disputes about beneficiaries when a murder-suicide is suspected
- Deathbed changes in a life insurance policy
- A policy indicates that children or grandchildren are beneficiaries, but some have predeceased the policy holder
- Stepchildren and adopted children may or may not be indicated in the policy
Family Issues in Beneficiary Disputes
If you believe you have good reason to dispute a beneficiary designation, please consult with a life insurance attorney, primarily because they are experts in what they do and understand the many laws involved. But there is another reason to use an attorney, particularly if you will be disputing a beneficiary who is a family member. By letting professionals handle the details, you can distance yourself a bit and make this less of a personal matter. It’s always difficult when families disagree, but having each individual represented by a lawyer can keep things civil and perhaps help preserve a family bond despite the circumstances.