Life Insurance/Annuity, can a non beneficiary contest it?

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PostPosted: Sun Aug 08, 2010 12:34 pm   Post subject: Life Insurance/Annuity, can a non beneficiary contest it?  

My father inlaw passed away a couple of months ago. A month prior to passing away, his wife of 30 years (2nd marriage) left him and filed for Legal Separation. After being served w/papers he changed his Life Insurance Policy Beneficiary to my husband. He also changed his Will leaving "his share" of financial & property assets to my husband, his only child. A week or so before he passed, he filed for divorce. Since his passing, his wife has contested the Life Insurance Policy and we believe "cashed out" part of the Annuity. Questions? Since his wife is contesting the Life Insurance Policy, w/her name not being listed as beneficiary can my husband contest the Annuity, if, he is not listed as a beneficiary? We are not sure of this as we don't have a copy of his Annuity Plan. The request is in progress. He is now the Executor of his father's estate.

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PostPosted: Sun Aug 08, 2010 1:25 pm   Post subject:   

Quote:
After being served w/papers he changed his Life Insurance Policy Beneficiary to my husband. He also changed his Will leaving "his share" of financial & property assets to my husband, his only child.




Not uncommon, and sounds like it was accomplished in a rather timely fashion.



Beneficiaries are beneficiaries, and most courts will not violate the desire of a person to name someone or something as their beneficiary -- of life insurance proceeds or their property in a will. Absent proof of mental incompetency on the part of the decedent at the time the changes were made, or proof of "duress" -- that the owner was forced to do something against his will, such as at gunpoint, to contest this is normally fruitless, unless a beneficiary can be legally invalidated (such as a person who is currently a convicted felon residing behind bars, or one who is legally incapacitated, in which case the court would place the beneficiary's funds under its supervision, not distribute it to some other person for their benefit).



Being served with "separation papers" or "divorce papers" is not duress, but it is often a tipping point at which a person makes such a change. It is a common occurrence.



As far as the annuity is concerned, if you know the insurance company, they can assist you (I wouldn't be surprised if it's the same company his life insurance was with). If you don't, try the agent who sold him the life insurance. Otherwise, good luck -- it will be nearly impossible to track that down. The only other possible source of information would be bank records showing money sent to an insurance company via check, ACH transfer, or a wire transfer, or a transfer from a stock brokerage account to an insurance company.



If the departing spouse was the beneficiary of the annuity and your husband's father failed to change the beneficiary statement on that contract, your husband is out of luck.



As for the life insurance, the departing spouse is out of luck. There is apparently no suggestion that your husband's father was not of sound mind, so his ability to change the beneficiary would only be limited by a previously named irrevocable beneficiary, which is probably not the case. There is really nothing here for the departing spouse to contest. She's the one who left, and can only blame herself for her "husband's" speedy reaction.



In what manner has she "contested"?


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PostPosted: Sun Aug 08, 2010 4:45 pm   Post subject: life insurance/annuity  

Thank you. The wife/lawyer sent written letter to insurance company contesting my husband be awarded 100% of life insurance policy. If this goes to court, and she loses, is my husband eligible to sue for court costs/expenses?



Since my husband is the Executor of his fathers' estate and major % of his wealth is tied up in the annuity, is there a way that he can recoop our thousands of dollars spent in the past 60 days?

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PostPosted: Mon Aug 09, 2010 6:00 am   Post subject:   

Quote:
is there a way that he can recoop our thousands of dollars spent in the past 60 days?




This is a matter for the probate court. It depends on what the money was spent on. Direct expenses of the estate, such as mortuary and funeral costs, legal fees, and the like, are all payable by the estate, so if your husband paid any of these expenses out of pocket, he is entitled to reimbursement from estate assets.



Quote:
The wife/lawyer sent written letter to insurance company contesting my husband be awarded 100% of life insurance policy. If this goes to court, and she loses, is my husband eligible to sue for court costs/expenses?




Normally, in a civil action, you would not "sue" the Plaintiff for your cost to defend, but you would ask for court costs, and legal expenses in your first response to the civil complaint (which would probably be seeking a "summary judgment" on the basis that the departed wife has no standing to bring her suit, and that it should be dismissed without any further arguments [you have to also provide "points and authorities" for that position, but a good civil/insurance lawyer can help with that]). If you prevail, then the court would most likely award you those amounts.



In some states, the court may also award "punitive" damages to compensate you for the hassle of having to defend a non-issue (since lawyers are supposed to know better than to file complaints they know they cannot win).



If you haven't yet sent a letter to the life insurance company arguing that the "contested" beneficiary matter is not their concern, you should. The letter should remind the insurer that there are no grounds on which to reject the newest beneficiary designation, as your husband's father was of sound mind at the moment.



And try to locate that annuity. If the departed spouse was not truly entitled to the proceeds, but gets them anyway, once the money is gone, it is highly unlikely you'd ever see a penny of it.[/quote]


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PostPosted: Mon Aug 09, 2010 12:01 pm   Post subject: life insurance/annuity  

Again, thank you for your advice. A couple final thoughts. Why would a lawyer legally work on someone's behalf if the client truly doesn't have any right, under the law, to what they are "contesting" (i.e. life insurance policy that they are not listed the beneficiary of)? People can buy life insurance policies through work, on their own, etc. How you buy/get the policy, does that matter/effect how it's paid out? My husband is just scratching his head at how she thinks her contestment will stand up in a court of law.



We should get the annuity information mid week and hopefully my husband is listed as a beneficiary. What if wife is listed as primary and he is listed as a contingent. Is he still not eligible for any Annuity money even though his father's Will states so?



Lastly, my husband mentioned that his father's home may have been changed into the wife's name, only, earlier this year. If we find out that is correct, will that hinder my husband recooping any/all lawyer & funeral fees from the estate?

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PostPosted: Mon Aug 09, 2010 10:36 pm   Post subject:   

Quote:
Why would a lawyer legally work on someone's behalf if the client truly doesn't have any right, under the law, to what they are "contesting"




They do it because they get paid. If they win the case, they may take a percentage, if they lose, they still get paid by the client in most cases.



Quote:
What if wife is listed as primary and he is listed as a contingent. Is he still not eligible for any Annuity money even though his father's Will states so?




A discussion of wills and insurance do not really belong in the same sentence. Insurance beneficiaries cannot be undone by a will, and generally cannot be undone by a court, unless a beneficiary is disqualified (as Scott Peterson was following his murder conviction for his wife's death -- and, yes, a lawyer tried to get the money for him, and lost big time -- because no one had any money left to pay the lawyer), or there is a showing of mental incompetency the part of or duress inflicted on the insured.



Quote:
Lastly, my husband mentioned that his father's home may have been changed into the wife's name, only, earlier this year. If we find out that is correct, will that hinder my husband recooping any/all lawyer & funeral fees from the estate?




That would be most unfortunate. Unless you could prove some sort of wrongdoing on the part of the wife, the court will stay out of that mess. If there are no other estate assets, it will be tough for your husband to collect anything else.


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PostPosted: Tue Aug 10, 2010 3:46 am   Post subject:   

Quote:
Why would a lawyer legally work on someone's behalf if the client truly doesn't have any right, under the law, to what they are "contesting" (i.e. life insurance policy that they are not listed the beneficiary of)?




Because a lot of lawyers understand the law surrounding these topics less than we do.
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PostPosted: Sat Apr 20, 2013 12:32 am   Post subject: Life insurance  

A life insurance policy is left to one beneficiary. A full sister The insured had no will. Two half brothers want to take the beneficiary to court for a share. One brother never made an effort to know her and the other did maybe 15% of the time. I'm the dad of the two sisters.


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PostPosted: Sat Apr 20, 2013 4:17 am   Post subject:   

Quote:
Two half brothers want to take the beneficiary to court for a share.
They will share 100% of nothing, and could have to pay the legal expenses of the beneficiary who needlessly has to defend herself against a frivolous lawsuit.



The two brothers have no standing to sue for anything. The policyowner may freely name anyone or anything (and multiples thereof) as beneficiary, and may choose not to name anyone or anything specifically for the purpose of not leaving them any of the money.


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PostPosted: Wed May 08, 2013 2:29 am   Post subject: Beneficiary on annuity  

Can a spouse contest an annuity in court and win when someone else is named the beneficiary


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PostPosted: Wed May 08, 2013 12:01 pm   Post subject:   

Unless the annuity is connect to a qualified retirement plan, the answer is NO. What is your reason to contest the beneficiary?



Even if the annuity is connected to a qualified retirement plan, the answer is still probably NO, especially if governed under ERISA and the Summary Plan Description (or Plan Document itself) does not require a current spouse to be named the beneficiary.



When benefits are subject to a QUADROS, the participant spouse is supposed to notify the plan administrator of the order, but it is truly the former spouse's responsibility to notify the plan administrator of the court's order, and failure to do that can sometimes relieve the plan of its obligation to the former spouse.



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