From time to time, beneficiaries of a life insurance policy may dispute each other’s entitlement to the life insurance proceeds. A dispute may arise for many different reasons, but some reasons include:

Change of beneficiary form(s) were not completed properly by the policy owner (i.e., negligently). For example, the allocation of the percentages of the proceeds may not equal 100%, or there may be confusion caused by designating certain beneficiaries as primary or contingent.
Change of beneficiary form(s) were not completed by the policy owner (i.e., a fraud or forgery occurred). For example, the policy owner’s signature may be forged, or the names of the beneficiaries or the allocation of the policy proceeds may be manipulated without permission from the policy owner.
One of the beneficiaries is entitled to receive some or all of the proceeds pursuant to a divorce settlement. For instance, life insurance benefits may be used to secure the payment of alimony or child support.
One of the beneficiaries is alleged to have murdered the policy owner, which may disqualify that beneficiary from receiving any proceeds under a “slayer statute.”
One of the beneficiaries allegedly exercised undue influence over the policy owner in order to convince or force the policy owner to list the beneficiary as the recipient of some or all of the proceeds.
The policy owner allegedly lacked the mental capacity to designate beneficiaries to receive some or all of proceeds.

When a dispute arises among beneficiaries of a life insurance policy, the insurance company is frequently “stuck in the middle.” In this common scenario, the insurance company will file a lawsuit, typically called a Complaint in Interpleader. The Complaint in Interpleader will name the beneficiaries as defendants and allege that there are conflicting claims to the policy proceeds, that it does not know who is entitled to the proceeds, and that it does not want to risk paying the proceeds twice. It is important for beneficiaries to timely respond to a Complaint in Interpleader, as the failure to do so will result in a default and prevent a beneficiary from collecting any of the policy proceeds. Soon after the Complaint in Interpleader is filed, the insurer will request permission from the court to deposit the policy proceeds into the court registry and to be dismissed from the lawsuit, so that the beneficiaries may fight over entitlement to the proceeds. Then, the beneficiaries will engage in the discovery process (e.g., the exchange of documents and testifying under oath at depositions) and later present their respective legal positions to the Court and possibly, to a jury.

Joel Ewusiak represents beneficiaries who are named as defendants in a Complaint for Interpleader and who are seeking their rightful share of death benefits owed under a life insurance policy. Please contact Joel for legal assistance with your specific dispute.