It's more difficult to contest a life insurance beneficiary than a will.If you can show that the deceased neglected to update the policy after a major life change, such as remarriage or adoption, a court may order the insurance be paid to another beneficiary.
Step 1: Contact an attorney.
Interpleader actions are very detailed and far reaching.Judges have great latitude for discretion, as many different things are likely to impact your case.If you can afford an attorney who knows what your judge favors and what you don't, you should hire them.There is a way to find a good attorney.Unbundled services are provided by attorneys if you can't afford a full-service attorney.Preparing documents, teaching you the law as it applies to your case, and coaching you through the legal process are some of the unbundled services.
Step 2: The action has a time sensitivity.
Before the insurance company pays out the claim, you should challenge the beneficiary designation.If there is a formal dispute between the beneficiary and the insurance company, they will pay the policy out to a trust held by the courts.It will be difficult to collect insurance proceeds from someone who has already been paid.You will need to file a suit if the insurance company pays to the named beneficiary.You may have difficulty collecting if the individual has already spent the policy's proceeds.You may not be able to collect if the individual has no assets.
Step 3: You should check your state laws.
In some states, insurance proceeds must go to certain people.Unless the spouse consents in writing to a different beneficiary designation, many states require a spouse be designated as beneficiary.Links to your state laws can be found on the websites of the governor, the highest court, and the legislature.Review the statutes for insurance.
Step 4: Look for court orders.
In divorce and child custody cases, courts will often order support paying persons to name recipients as beneficiaries of life insurance policies in case of the payor's death.Child support payments are guaranteed by a life insurance policy naming either the person with custody or a trust for the child as the beneficiary.Spousal support payments can be guaranteed by a life insurance policy.It is possible for a life insurance policy to be paid to the spouse who was awarded the clear asset in a property settlement.
Step 5: Look for contradictions.
If the named beneficiary is not clear, insurance companies can't pay until they know who that is.The Beneficiary is designated as the deceased's spouse.There is more than one child in the beneficiary.State law requires designation of current spouse for beneficiary to be designated by name.
Step 6: There may be evidence of fraud or influence.
If beneficiary designations are made by fraud, undue influence, or mental incompetency, courts will set aside them.These are difficult to prove.When a person is told they are signing something other than what they actually are, or when they rely on untrue information to convince them to sign the beneficiary designation, it can be fraud.Undue influence is when someone convinces the insured to sign the beneficiary designation.If a beneficiary is acting as a power-of-attorney or other position of trust, they can be rebutted.Mental incompetence is the inability to understand the nature of the document being signed.The definition will vary from state to state.As of the time the document was signed, a person with dementia or other illnesses is presumed to be incompetent.
Step 7: The clerk of courts can be contacted.
Child support orders with life insurance provisions can be obtained by contacting the clerk of the court that issued them.The full names of the parties to the case, such as the parents, are required for certified copies.The estimated date is for the order.If the names are common in that area, the case number, attorneys, judges and other identifying information should be included.
Step 8: The Department of Vital Statistics can be reached.
The Department of Vital Statistics can help you get birth certificates or marriage licenses if you need them.You will need to pay a fee if you want to get the document.The proof may include a copy of a drivers license.There is a copy of a passport.You can get access to the document with a copy of the court order.
Step 9: Discuss potential witnesses with them.
For claims of fraud, mental incompetence, or undue influence, witnesses will be necessary.You need to be able to prove specific instances of conduct.When talking with potential witnesses, ask them to be specific in certain instances where certain behaviors occurred, such as how many times Aunt Sally forgot where she lived or how the current beneficiary refused to allow her to spend time with her previously beloved niece or nephew.They should write a statement about what they observed.Prepare them to testify on your behalf.
Step 10: Inform the life insurance company.
Unless the insurance company is formally informed in writing of a challenge to the beneficiary, they must pay.The insurance company will file an interpleader action with the courts once the beneficiary is officially challenged.The proceeds of the policy will be deposited with the court.All parties will be named and served by the insurance company.The court will decide who gets the money after the insurance company withdraws from the case.
Step 11: The interpleader action requires you to respond.
You must take certain actions within a specified period of time when you receive notice of the interpleader action.Hire an attorney for these and other legal actions.You have to file your answer with the court and serve it on the other people within 21 to 45 days of receiving the summons or citation.All of the reasons you believe you are entitled to the proceeds must be stated in your answer.You or your attorney must sign your answer.
Step 12: If you want to settle, consider it.
Most courts will require at least one attempt at mediation.Some cases settle before they go to trial because of the high cost of litigating.If it is cost-effective to pursue through trial based on the amount of insurance proceeds, then so be it.If it is a small policy, the cost of pursuing the case to trial could be more than you will get from the insurance policy.A neutral third party tries to help the claimants reach a settlement.Settlement conference is when the parties attempt to reach a settlement without the help of a neutral third party.