Policy terms as well as local, state, and federal legislation govern life insurance payouts. After someone passes away, the law pertaining to wills, trusts, family, divorce, child support, and estate planning may all come into play. The beneficiary listed in the policy is typically the one who receives the benefits. However, it happens frequently that someone other than the designated beneficiary has a legitimate claim to the insurance proceeds. As a result, the beneficiary designation for the life insurance policy may be disputed. Our life insurance attorneys can dispute any policy and win.
When Do Individuals Typically Contest Life Insurance Beneficiaries?
The most frequent instances are disagreements with current or former spouses, children from other marriages, an insured person's incapacity, undue influence or duress, or an improper beneficiary change.
Beneficiary Designation of a Former Spouse
A beneficiary designation made in the past in favor of an ex-spouse is often revoked by divorce in several states. In this situation, issues can arise. The life insurance policy might not have a beneficiary if the ex-spouse passes away before the insured. In such situations, life insurance proceeds may become a part of the estate, be divided after probate, or be paid to the insured's surviving family members in accordance with intestacy laws. Our attorneys can fight this situation and win.
Claim for Community Property by the Spouse
Assets earned or acquired during marriage by either the insured or the surviving spouse are assumed to be community property if the insured resided in a state where this is the case. This holds true for marriages that end in divorce as well as marriages that end in death.
When an insurance policy was purchased with communal funds for the benefit of a person not involved in the marriage, the surviving spouse may be able to make a claim for constructive fraud under the laws of the community property state.
Invalid or Forger Due to Undue Influence or Lack of Mental Capacity
It is possible to contest beneficiary designations on the grounds that the insured lacked the mental ability or was improperly influenced during a beneficiary change. Such impromptu beneficiary changes take place when the insured is critically ill, hospitalized, in a nursing home, or has a compromised mental state.
They typically happen a day or two before the covered person passes away. The insurance company that holds the policy is typically contacted by a caregiver or someone with access to the insured's life insurance information to request the change-of-beneficiary documents. After the insured has signed the forms, they forward them to the insurance provider.
The validity of last-minute beneficiary changes is uncertain.
They are valid if the insured signs them while in a state where they can comprehend the nature of the documents and the implications of changing the beneficiary, and if it is done voluntarily and without undue coercion or pressure.
The former beneficiary and the new beneficiary will likely submit competing claims for the same life insurance benefits if a last-minute beneficiary change occurred. A last-minute change can be contested by the prior beneficiary by providing proof of fraud, duress, undue influence, or physical and mental incapacity.
Our life insurance law firm can fight any claim and win.