Life insurance companies often file interpleader lawsuits after a policyholder dies following a divorce. They claim they cannot determine who should receive the benefit. In many cases, the insurer files the interpleader because it does not understand the state’s divorce revocation statute or misapplies the law entirely. Families are dragged into federal court even though the law is clear and the rightful beneficiary is obvious.
This is not a real dispute. It is an administrative failure. When insurers do not know the law, they shift the burden to grieving families and force them to litigate issues that should have been resolved at the claim stage.
How Divorce Revocation Laws Work
Most states have statutes that automatically revoke an ex spouse as a beneficiary on life insurance unless the divorce decree says otherwise. These laws are designed to prevent accidental windfalls and to reflect the reality that most people do not intend for an ex spouse to remain the beneficiary.
The rules are straightforward. If the state has a revocation statute, and the divorce decree does not preserve the ex spouse’s rights, the ex spouse is treated as if they predeceased the insured. The benefit passes to the next valid beneficiary.
Despite this clarity, insurers often misapply the law.
Why Insurers File Interpleader After Divorce
Insurers file interpleader for several predictable reasons:
They do not understand the state’s revocation statute
They incorrectly assume federal law preempts state law
They misread the divorce decree
They fear liability and file interpleader to protect themselves
They rely on outdated internal guidelines
They treat every divorce as a dispute even when the law is clear
Instead of making a legal determination, insurers push the problem to the court. This delays payment, increases costs, and forces families into unnecessary litigation.
When Insurers Misapply ERISA
In employer sponsored plans, insurers often claim that ERISA preempts state revocation statutes. This is wrong in many cases. The Supreme Court has held that ERISA preemption does not apply when the plan is not governed by ERISA or when the statute does not interfere with plan administration.
Insurers frequently misunderstand:
Whether the plan is actually an ERISA plan
Whether the state statute is preempted
Whether the divorce decree controls the outcome
Whether the beneficiary designation was updated after divorce
These errors lead to interpleader filings that never should have happened.
How These Cases Turn Into Multi Party Disputes
Once the insurer files interpleader, the court must determine the rightful beneficiary. This often involves:
Reviewing the divorce decree
Analyzing the state’s revocation statute
Determining whether ERISA applies
Reviewing beneficiary forms
Evaluating whether the insured reaffirmed the ex spouse after divorce
Most cases resolve quickly once the law is applied correctly. The problem is that families are forced to litigate issues the insurer should have resolved before filing.
What Beneficiaries Should Do When an Interpleader Is Filed After Divorce
Beneficiaries should gather:
The divorce decree
Any settlement agreements
All beneficiary forms
Communications with the insurer
The full claim file
The goal is to show that the law clearly identifies the rightful beneficiary and that the interpleader was unnecessary.
Why These Cases Require Immediate Legal Action
Interpleader cases move quickly. Courts expect beneficiaries to respond promptly. Without legal representation, families risk losing the benefit or being outmaneuvered by procedural rules.
A lawyer can:
Challenge the insurer’s misunderstanding of the law
Prove the correct beneficiary under state statute or the divorce decree
Seek attorney fees when the interpleader was unnecessary
Push for fast resolution so the benefit is paid without delay
When insurers file interpleader because they do not know the law, the solution is not to accept the dispute. The solution is to correct the insurer’s mistake and secure the benefit.