Life Insurance Beneficiary

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Beneficiary Disputes

Whether you are challenging a purported beneficiary designation or defending a challenge to a designation in your favor, we can help. We have substantial experience in both defending and challenging designations. Attorney J. Michael Young is a recognized authority in this highly focused field of practice.  He has published an article for other practitioners entitled Recognizing Life Insurance Beneficiary Disputes

Common reasons for life insurance beneficiary challenges involve claims of lack of capacity or undue influence. Often there is some evidence the owner tried to change a beneficiary designation before death.  In some instances, a spouse may have rights under state laws to a portion of the policy proceeds.

It is extremely important to consult an experienced life insurance dispute lawyer early in the process.  Solid legal advice and reliable experience can make the difference between you getting the proceeds you are rightfully owed or nothing at all.  Rest assured that your opponent is likely seeking legal counsel. You do not want to be at an early disadvantage, without aggressive representation.

Common claims in a beneficiary dispute:

  • Claim of a lack of mental capacity to execute a designation

  • Claim that a designation was the product of undue influence

  • Claim that a designation was the product of fraud

  • Claim that the owner of the policy expressed a clear intent to change the beneficiary

  • Claim that the owner of a policy did or did not substantially comply with designation rules

  • Claim that a spouse is entitled to the benefits

  • Claim that a designation in favor of an ex-spouse is overruled by a divorce

  • Claim that a divorce decree provides an ex-spouse with rights in the life insurance benefits

  • Claim that a power of attorney was wrongly used to designate a beneficiary

  • Claim that the beneficiary killed the policy owner

We can assist you in evaluating a potential beneficiary challenge. We can also evaluate the strength of your position in defending a designation in your favor. We have represented clients from around the country in life insurance disputes and will use that experience in your favor.

What is an Interpleader Lawsuit?

Sometimes, more than one person claims to be the rightful beneficiary of the policy. The law does not force an insurance company to weigh the merits of potential claimants and decide who to pay the benefits. Paying the wrong person can expose the insurance company to a lawsuit from the disgruntled claimant and even potential double liability.  

Instead of taking chances, the insurance company can file a type of lawsuit known as an interpleader. An interpleader allows someone holding disputed funds to file a lawsuit and let a court decide the proper owner. The interpleader prevents the life insurance company from being obliged to determine at its peril which person has the better claim. As part of the process, the insurance company will name the competing claimants as defendants, deposit the money with the court, and typically obtain an order releasing it from any liability.

When faced with competing claims, the life insurance company will send letters to each claimant notifying them of a dispute and often allow a period to resolve it informally.  That is what is commonly known as a pre-interpleader letter.  If you have not already hired a lawyer, it is very important to do so after you receive that letter from the insurance company. If the matter cannot be resolved at that stage, the claimants and their lawyers will appear in the interpleader lawsuit.