Can A Life Insurance Beneficiary Be Contested?

Yes, after an insured person has passed away, as long as you have a valid reason, you can contest a life insurance beneficiary. Suppose you have any information that points to the beneficiary that the insured originally chose being invalid in some way. In that case, you can appeal to the insurance company not to pay out any money to the invalid party.

While it is certainly possible, contesting a beneficiary is not necessarily an easy or quick process. Aside from the policyholder themself, only the courts can remove a beneficiary from a life insurance policy. The exact process and power the courts have to make any posthumous changes to a life insurance policy will depend on the company that issued the policy, the policy itself, and the applicable state and federal laws. If you want to contest a beneficiary, you should contact a life insurance attorney. Your lawyer will be able to help you along the way.

When Can A Beneficiary Be Contested?

There are several reasons you may have to contest a life insurance beneficiary decision. Often, beneficiaries are contested because the insured person forgot to update the life insurance policy after a major life event, such as a divorce or having a child.

Beneficiaries are most likely to be contested when a beneficiary change request is not submitted in a timely manner. Some of the most common situations that can lead to a contested beneficiary are:

  • The insured person gets divorced and remarried. If they failed to update their policy to exclude their former spouse, that former partner has possible grounds to contest any decision that leaves them out of the policy.
  • The insured person is suspected not to have the mental capacity to change beneficiaries validly. Especially if the policyholder is older or otherwise in bad health, or if the changes made are not properly witnessed, it opens the door to contest any changes they attempt to implement.
  • The insured person is suspected of having been pressured into making a change to the beneficiaries. Again, especially if age, dementia, or other impairments are a factor, there is always the possibility that the insured person is having pressure put on them to change their policy to benefit the pressuring party.

If any of the above factors are in place, there is a legal history for contesting the beneficiaries of a life insurance policy. If the contesting is successful, it is generally because you are able to show falsification of documents, coerced changes to the beneficiary form, or lessened mental capacity of the policyholder.

What Happens If I Contest A Beneficiary?

If you believe you have a case to contest a life insurance beneficiary, you have to file a lawsuit with the probate court that is handling the insured person’s estate. As long as an appeal is ongoing, the insurance company won’t pay out any of the money from the policy. Instead, they will usually hold onto it or put it into a particular account controlled by the probate court.

While the case is pending, the court may choose not to distribute any of the deceased policyholder’s estate (such as real estate or bank accounts), given that beneficiary is contesting cases. If each side agrees, it can save both time and money to settle out of court rather than litigating the entire process. However, finding a middle ground that both parties can agree to can be pretty challenging because of how thorny these disputes often get. Most often, a probate judge will have to be the deciding factor.

When it comes to the case itself, both the beneficiary and the person who is contesting that beneficiary will most likely have to be present and need to show evidence and argumentation in court. Given the complexity of such cases, you will want to hire a life insurance attorney.

How Can I Make Sure I Don’t Have To Deal With A Contested Beneficiary Decision?

As a beneficiary, you can do nothing to avoid a beneficiary contest after the insured person has passed away. Because of this, it is the responsibility of the policyholder to minimize the chances of their choice of beneficiary or beneficiaries being contested when they die. The best ways to do this are:

  • Reviewing and changing, where appropriate, your life insurance policy after any major life changes
  • Double checking that changing beneficiaries won’t lead to a conflict in the future with remarrying or having children
  • Follow the guidelines the insurance company lays out whenever you make any changes to your policy. Make sure your mistakes are timely and allow the changes you wanted to make
  • Tell any former beneficiaries that they have been removed to avoid disagreements on that subject after you pass away.

What Should I Do If I Am In A Beneficiary Contest?

Your first step, if you have to be involved in a beneficiary contest, is to hire an experienced life insurance attorney.
At McKennon law group, we offer free consultations so you can get to the bottom of your legal questions. We have the experience, professionalism, and dedication you need. Don’t hesitate; call now and get the protection and guidance you deserve.

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