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Contesting A Life Insurance Beneficiary

Part of purchasing a life insurance policy is designating the person, also called the beneficiary, who will receive the benefits of the policy upon the policyholder’s death. There are times when that beneficiary may come under dispute. This is known as contesting a life insurance beneficiary.

When choosing a beneficiary, typically, a spouse, partner, child, or relative is chosen. This raises no eyebrows among loved ones as they all are sure this is the person who should receive the insurance benefits. Problems arise when someone does not believe that the beneficiary is someone the policyholder would have chosen.

If there is disagreement over who receives the policy’s payout, it can be contested. This can lead to a combative court case at times.

Life Insurance Beneficiaries Can Be Contested

Legally, anyone can legally contest a life insurance policy’s beneficiary after the death of the policyholder. This is most often done when someone is surprised to find out that they are not the beneficiary. If they believe they are entitled to the policy’s payout, they may initiate a dispute to contest it.

Disputing who was named as the beneficiary can be a complicated, expensive ordeal. Only the court may overturn the person named as beneficiary. Insurance companies cannot change or alter the beneficiary without a court order to do so.

Removing a Beneficiary From a Life Insurance Policy

Policyholders are the ones paying for the policy. Therefore they can change the beneficiary whenever they see fit. Though complications can arise, so it is best to be informed. Listed below are some of the things you should know:

  • To change beneficiaries on a life insurance policy, you must follow the correct procedures. Simply stating the change in your will, will not make the appropriate changes.
  • If the changes are made very close to the death of the policyholder, especially if they are physically or mentally compromised, the beneficiary is more often contested.
  • Sometimes, especially in times of child custody or divorce, the court orders an insurance policy for a certain individual. If a court order has named a beneficiary, removing a named beneficiary may violate court orders. Check to make sure this does not apply to any changes you may want to make.

A court can only remove a beneficiary under certain conditions. Whether they have the ability to do this will depend on the limitations of the insurance policy’s terms or if there are state or federal laws to uphold.

The Procedure for Contesting a Life Insurance Beneficiary

A person who wishes to contest a life insurance beneficiary must go through the right channels. This starts by filing a lawsuit or required papers through probate court. This probate court must be the one handling the estate of the life insurance policyholder. If there is a suit filed, the insurance company must not payout the benefits until the case is resolved.

The insurance company will typically put the money into an escrow account. This escrow account will be overseen by the probate judge.

The beneficiary who is being contested and the person doing the contesting will need to gather and deliver evidence to the court. Contesting a life insurance beneficiary is a challenging process that requires lawyers and expert testimony, and all sorts of evidence. Settling the estate might be put on hold while the life insurance beneficiary is resolved, causing taxes and debts to mount.

Throughout the case, negotiations may take place. Although, these are often beyond negotiations since there is typically animosity and distrust in these cases. If the involved parties cannot resolve the case on their own, the probate judge will decide the result.

Contact the Surrano Law Firm for Help

If you believe a beneficiary was wrongly named, or if you were named beneficiary and someone is contesting it, the legal team at the Surrano Law Firm can help. Our skilled, experienced life insurance beneficiary contest attorneys are ready to help you gain the best possible resolution to your case.