Disputes over life insurance beneficiaries often begin with a simple but critical misunderstanding. Marriage alone does not give a spouse the right to change a life insurance beneficiary. Only the policy owner has that authority. When a spouse attempts to alter a beneficiary designation without legal ownership or authorization, the resulting conflict can place the entire payout in dispute.
These situations commonly surface after death, when the insurer receives conflicting claims or discovers irregularities in the beneficiary change process. Understanding how policy ownership works is the first step in evaluating whether a beneficiary change is valid. When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
Policy Ownership Controls Beneficiary Rights
A life insurance policy is a contract. The person who owns the policy controls its key terms, including who receives the death benefit. In most cases, the insured is also the owner, but that is not always true. Policies can be owned by spouses, trusts, businesses, or other third parties.
Only the policy owner can:
• name beneficiaries
• change beneficiaries
• assign ownership
• authorize third party control
A spouse who is not the owner has no unilateral authority to modify the policy, regardless of marital status. Insurers generally require a signed change of beneficiary form from the owner and will reject requests that do not meet that requirement.
Why Marriage Does Not Automatically Control the Outcome
Many people assume that being married guarantees a spouse will receive life insurance proceeds. That assumption is incorrect. Life insurance pays according to the beneficiary designation on file, not marital status.
If the insured named a parent, child, former spouse, or trust as beneficiary, that designation typically controls. The insurer is contractually obligated to follow the policy terms unless a valid legal challenge succeeds.
This is why disputes arise when a surviving spouse believes they should receive the benefit but discovers they were never named or were removed without their knowledge.
Community Property States Add a Layer of Complexity
In community property states, marital funds are generally considered jointly owned. If a life insurance policy was purchased or maintained with community funds, a surviving spouse may have a claim to a portion of the proceeds, even if they are not the named beneficiary.
This does not mean the spouse can change the beneficiary designation. It means they may later assert a legal claim to their share of the proceeds. These claims are fact specific and often depend on:
• when the policy was purchased
• how premiums were paid
• whether separate property funds were used
• whether any waiver exists
Even in these states, insurers usually pay the named beneficiary first, leaving competing claims to be resolved afterward through legal proceedings.
When a Spouse Claims a Change Was Made
Some disputes involve allegations that a spouse submitted a beneficiary change without authority. These cases often raise questions about how the insurer processed the request.
Common red flags include:
• missing or forged signatures
• electronic changes without proper authentication
• forms submitted shortly before death
• changes inconsistent with prior designations
Insurers have procedures designed to prevent unauthorized changes, but errors do occur. When a questionable change is identified, the insurer may freeze payment and require the parties to resolve the dispute.
Power of Attorney and Incapacity Issues
A power of attorney does not automatically allow beneficiary changes. Authority must be specifically granted in the document. Many powers of attorney permit financial transactions but prohibit altering beneficiary designations.
If a spouse relies on a power of attorney to change a beneficiary without explicit authority, the change may be invalid. Courts scrutinize these actions closely, particularly when the change benefits the agent.
Guardianship and conservatorship arrangements are treated similarly. Without court approval, beneficiary changes are often prohibited.
Irrevocable Beneficiaries and Divorce Orders
In some cases, a spouse is named as an irrevocable beneficiary. This commonly occurs in divorce settlements or court orders intended to secure support obligations.
When a beneficiary is irrevocable:
• the insured cannot remove them unilaterally
• consent is usually required to make changes
• insurers will reject unauthorized modifications
Disputes arise when later spouses are unaware of these restrictions or when changes are attempted in violation of a court order.
What Happens When No Valid Beneficiary Exists
If no valid beneficiary is in place at death, the policy proceeds usually become payable to the insured’s estate. At that point, distribution follows the will or state intestacy law.
This can significantly delay payment and expose the funds to creditors, taxes, and probate costs. It is one of the most common consequences of improper or disputed beneficiary changes.
Preventing These Disputes Before They Start
Most beneficiary disputes are preventable. Clear documentation and regular policy reviews reduce the risk of confusion.
Best practices include:
• confirming policy ownership
• reviewing beneficiary designations after major life events
• keeping copies of submitted change forms
• coordinating estate planning documents with policy terms
In blended families or second marriages, written agreements can clarify expectations and reduce later conflict.
A Narrow but High Impact Issue
Unauthorized beneficiary changes do not involve broad policy interpretation. They turn on authority, documentation, and timing. When a spouse lacks ownership or legal authorization, their attempt to change a beneficiary may not survive scrutiny.
Families facing this issue should focus on who owned the policy, how the change was made, and whether proper authority existed. Those details often determine whether the original designation stands.
Final Thought
Only the policy owner controls beneficiary designations. Marriage alone does not override that rule. When a spouse attempts to change a beneficiary without legal authority, the resulting dispute can delay payment and place the proceeds at risk.
Understanding ownership and authorization is essential to evaluating these conflicts and determining whether a beneficiary change is valid or vulnerable.