by whisperingpoetess » Wed Feb 22, 2012 11:31 pm
My Dad passed away on October 19 in California. He had been ill for sometime but only got a determination of health that came back as him having stage 4 cancer six months before he died. He let my sister know and so she took off from her job and basicly went to be with him and care for him . She and I are his only children. He is divorced from wife number two, J.M., and his third wife R.M. was estranged from him in their marriage of say seven years. While my sister was in Cali, she was pretty much brow beat by his girlfriend and her kids saying she was not doing good for him etc. Also my Daddy did not want his estranged wife to know he was ill and in the hospital. When she did find out, she went to the hospital and he had a heartattack and later that was followed by a stroke. He was placed on hospice and succumbed no more than seven days after. However while he was competent, able to talk, and move etc, he had the best lawyer come to the hospital and write up a poa for my sister. (I know she was the best because she was the lawyer I found after his death who I thought could help my sister protect herself. More about why below.) In it she was very thorough in writing out everything my sister was able to do to include changing the beneficiary on his life ins. policies she saw fit to change. He also gifted her his Mercedes which she has. I was here in FL doing research and advising my sister on things as best I could but I'm no lawyer. When Iread the poa upon going to Cali for his memorial service, I knew it was thorough and like my sister felt we had no problems. My sister submitted the paperwork to change the beneficiary on Daddy's military insurance one hour before he died. I don't know how she felt to do this, if she had a feeling he was going to die, but she did it then. She was careful in the filling out the information and all. I assume she submitted the death ceritifcate after his death. She got a benefits packet a few weeks later and returned it and then got a letter stating the benefits would be paid. Now the policy is being contested by an unknown party, we believed it to be the estranged wife, but recently my sister called and a person told her they would look at it and aske if she was the ex wife by name. J.M. My sister says it was being once again referred to the legal department. My sister is being accused of committing fraud when she did not. (This was the reason I initially researched and found the lawyer who had written the poa for my Daddy to give to my sister.) The doctors at the hospital say my sister's decorum during the time my father was there was exemplary and she was by far the most dedicated daughter to a father they had seen, and the lawyer who wrote the poa is considered top notch in her field. My sister did not force my Daddy to do anything in regard to his life ins., he gifted his Mercedes to her for her to sell and divide between us. What steps does the insurance company take to investigate fraud and does she need to do anything to dissprove it? How can she find out about learning who the contestor is? She has a lawyer and has conferred with them on this matter. I don't want her to face any repercussions for doing what was stated in the poa. I am listed as the contingent so I know there is nothing I can do to move things along. Any help would be appreciated regarding advice on this matter. We just want to get this over with and move on. Losing our Daddy was hard enough. Thank You.
Posted: Thu Feb 23, 2012 08:26 pm Post Subject:
First things first, who was the beneficiary before your sister attempted to make the change under the power of attorney? Wife #2 or Wife #3 or Girlfriend?
That person is the only one with potential legal standing to challenge anything. Knowing that will answer your primary question.
As for insurance fraud, I don't think there's any element of fraud present. No need to worry over that. If there was a claim of fraud, it would be more likely to arise between you and your sister, and it appears that the two of you have no issues between you.
If the proper form is used to make a change of beneficiary, it generally takes effect at the moment it is signed, even if just minutes before a person dies. The policyowner is usually the person required to sign that form. If your father was incapacitated at that time, he would not be able to do so.
The larger question in your situation is whether a Power of Attorney is sufficient to act in place of the policyowner. Only the policyowner is contractually capable of making a change of beneficiary. The claims department apparently believed that everything was in order when they sent your sister the claims kit. But they are not in a position to sort out complicated matters as this may be.
The insurance company's legal department will now review everything and make its determination of whether the original beneficiary or your sister is in position to receive the death benefit. One or the other will not be happy about the outcome of that determination. And that will likely lead to litigation, since the legal department could be wrong in its determination.
In all probability, however, once the legal department makes a determination of who it believes is the proper beneficiary, the insurance company will write the check to that party. They have no liability under the law for writing a check to the wrong person who they reasonably believe is the lawful beneficiary. They are simply fulfilling the terms of their contract in good faith. It happens.
If it can be later determined that the money was paid to the wrong beneficiary, the matter becomes an issue at law between the rightful beneficiary and the person who received the policy proceeds. A trial is necessary, and obviously that takes considerable time. And during that time the person with the money has the capacity to spend it . . . all of it.
Trying to get the money back once it's paid to another party can be next to impossible if they have already managed to spend it all and assert that they have no other recoverable assets. That can become an even more expensive and protracted civil case. Very messy.
If there is an open probate action, however, and there is a challenge to the status of the beneficiary, your sister can request that the insurance company pay the money directly to the Probate Court, and allow the Court to make the determination as to who the rightful beneficiary is. Insurance companies like this because it ends their involvement . . . when they write the check, even if to the Probate Court, they're done. They've satisfied the contract. Easy. No legal repercussions to haunt them.
This would be the most expeditious and judicious way to pursue the matter, and the insurance company should readily agree to do that. Although it means additional legal expense to others to argue the case in Probate Court, at least with the money in the hands of the Court, it will not have been paid to a wrong party.
The Probate Court will sort out the matter fairly quickly. The entire probate action, in California, is generally supposed to be completed within one year. Most probates are completed within 18 months.
When it comes to life insurance proceeds, that's a priority matter, because the money is often needed to pay estate liabilities, and the Court has a responsibility to make sure liabilities are paid as quickly as possible. A few petitions to express the litigants' positions and/or rebut the claims of the other party, possibly a hearing before the judge of 45 to 60 minutes' duration, and the judge renders his decision at the moment or within a few days. Someone wins and someone loses, and it's usually not followed by an appeal because the chance of the ruling being overturned is so small and the expense is so large.
Feel free to ask any additional questions. If you want to follow up in a more confidential manner, email me by clicking on the link below. And my condolences for the loss of your father. I know how trying a long distance matter such as this can be.
Posted: Fri Feb 24, 2012 04:28 pm Post Subject: Thanks 4 Your Reply
I had truly hoped you would answer my question as I have been reading this forum since the day I posted my question and I had hoped a person with credibility would respond. My sister and I are going thru a very emotional and stressful time and so we need an objective view to the situation. So thank you very much!
As for the original beneficiary, it was his third wife, R.M. I would like to say she was a nice person outside of this situation however since I've known her she has always shown herself to be nasty towards us girls. She is the one who is stating fraud was committed and who we believe is contesting the insurance. She has gone so far as to state to me that my Daddy didn't think I was his kid but gave me his name anyway. Such ugliness and greed after his death is understandable where she is concerned. She stands to glean $500,000 since my Daddy's death and we still can't fathom why she would want to go after his military benefits and the car he gifted my sister. Yet as you said, we felt it might be her as she is the only person with an interest in the matter.
She is the one who told me I should get my own lawyer because my sister would cheat me of what might be mine from my Dads estate. I have known sis for my entire life so no there is no animosity between us girls. I trust my sister and know she has my best interest at heart.
We feel that learning that the issue has gone back to the Legal Department is a good sign, as it was first placed in their department before the benefits packet was issued. However, my question is wouldn't a top notch lawyer's written p.o.a. that gave my sister the ability to change the beneficiary have standing? She is top notch in her field and I assume would know the law.
As for probate, at this time nothing is on the books where my Daddy's estate is concerned. He really did not have an 'estate' per se. He lived in an apartment for the last 15 years, had bought the Mercedes in 2009, and had left a descent but not significant amount of money in his bank accts. which my sister was made joint owner of along with him. The lawyer she has states that the money was hers to do with as she pleased so she used it to settle his bills and to pay for funeral expenses I believe. Some was used to send me home with things I wanted from the house, and some for her kids.
Again, I thank you for your response. I am going to forward you reply to my sister. If she has any questions or thoughts I will definitely forward them to you confidentially.
Thank you for your heartfelt condolences. It means alot.
Posted: Sat Feb 25, 2012 12:07 am Post Subject:
wouldn't a top notch lawyer's written p.o.a. that gave my sister the ability to change the beneficiary have standing? She is top notch in her field and I assume would know the law.
I don't know who your attorney is/was, but there are actually very few attorneys who understand insurance law. Life Insurance is a contract, and the language of a life insurance contract states the only person who has the right to alter a beneficiary statement is the OWNER of the contract. It does not state, "the owner or a person holding the owner's power of attorney."
Issues surrounding life insurance beneficiaries are probably the most frequent topics posted here. It is an area of insurance law that even agents fail to properly understand and they often give their clients very poor advice. An attorney inexperienced in insurance law is just as apt to make the same kinds of mistakes.
Typically, for a person acting under a Power of Attorney to be able to change the life insurance beneficiary, the POA must SPECIFICALLY state that is one of the rights being conferred by the Grantor (your father). A "standard" POA that most attorneys would execute is unlikely to include such a statement.
If you read the POA your father granted -- I assume you have a copy of it -- you need to see if the right to change the beneficiary is actually written into that document. If it is, then your "top notch" attorney did an excellent job, and there will be little or no issue to resolve. If not, then your attorney was negligent for failing to understand insurance law, and you will likely not be in a position to receive the policy proceeds.
If, due to your attorney's negligence, you lose the death benefit to Wife #3 (who, if not actually divorced from your father, would still be entitled as his beneficiary to the proceeds under CA probate law), then you may still be able to collect an amount equal to the lost money by suing the attorney for negligence.
That would not be a difficult case to win. The hard part is finding an attorney willing to sue another attorney -- there aren't too many like that. Sometimes, simply making a negligence complaint to the State Bar Association can motivate an attorney to settle a matter without the need for litigation or arbitration.
Posted: Sat Feb 25, 2012 01:53 am Post Subject:
My sister submitted the paperwork to change the beneficiary on Daddy's military insurance one hour before he died.
What exactly does this mean?
For a change of beneficiary to be in effect at the time of death, what exactly needs to take place?
In other words....
What if it is signed, but not mailed before death?
What if it is mailed, but not postmarked before death?
What if is postmarked before death, but not received by the insurance company before death?
What if it is received by the insurance company, but the change has not been made by the insurance company before death?
Posted: Sat Feb 25, 2012 09:18 am Post Subject:
The language of the policy will control the change. Most insurance companies make the change effective as of the date on the change of beneficiary form, not the date they receive the change form.
A few insurance companies may still issue policies that (1) require the policy to be returned for endorsement and/or (2) state in the contract that the change will become effective when the change form is received.
"One hour before" may be difficult to prove unless it is lawfully witnessed as such, receipted/logged as received by the USPS, FedEX, or UPS, or was faxed to the insurance company, which would positively time stamp the time of submission.
Again, beneficiary problems are among the most common issues that are querried here.
Posted: Sun Feb 26, 2012 05:39 pm Post Subject: About the P.O.A.
@ MaxHerr: Hi again. I spoke with my sister as she has the p.o.a. I did read it while in California and recalled it gave her the right to change beneficiaries on any of my Daddy's policies he held. I've been sharing your responses with her and she wrote back that the p.o.a. gave her that specific right and also stated she could change the beneficiary to herself if she cared to.
@gsbgsb: Once she completed all the paperwork for this particular policy, she faxed everything in to the insurance company. The death certificate was sent later.
One last question I have, I stated in my original post that my sister was basically brow beat and harassed by my Daddy's girlfriend and her children, and the estranged wife
caused her much grief during and after his illness. Can my sister sue the estranged wife for the insurance money she is projected to get from a few policies we found paperwork for? My sister is not sure the estranged wife knows about the policies and I'm not sure she told this woman about them. Has the latter ever been done in civil court? If this is not a question for this forum specifically then disregard. My sister has stated this is what she wants to do and I am just wondering if it is possible.
Thanks again for all the responses.
Posted: Sun Feb 26, 2012 06:30 pm Post Subject:
she wrote back that the p.o.a. gave her that specific right and also stated she could change the beneficiary to herself if she cared to.
Excellent! Exactly what was needed.
Once she completed all the paperwork for this particular policy, she faxed everything in to the insurance company.
Perfect! I assume the time of the fax is prior to the time of death noted on the death certificate.
Can my sister sue the estranged wife for the insurance money she is projected to get from a few policies we found paperwork for? My sister is not sure the estranged wife knows about the policies and I'm not sure she told this woman about them.
On this count, you are probably spinning your wheels. Either beneficiaries were changed or they were not, and whoever the beneficiary(ies) of record is, that's the way the policy will be paid.
Just as you are not be able to force your sister to share the life insurance proceeds with you (and if your sister does share the life insurance proceeds with you, it would likely be considered a "gift" for gift tax purposes -- and create a taxable event for your sister, not you), it would be improper for your sister to attempt to collect a death benefit from a policy of which she is not the beneficiary of record. No one may prevent the transmission of the policy proceeds to the rightful beneficiary.
If anyone, in response to a direct question prior to your father's death, concealed to your sister the fact that they were aware that additional policies existed, preventing her from making beneficiary changes, then she might be able to press a legal claim, but I'm not sure how successful the outcome would be. It would likely devolve into another "he said-she said" kind of dispute that the trier of fact -- judge or jury -- has to determine who's being most truthful. And again, if the money has already been paid, the recovery can only come from the party who received the money, not the insurance company.
So if your sister now wants to dispute the payment of a death claim that has NOT YET BEEN PAID, she can contact the other insurance companies to do so. If the money has been paid, it's a matter for the courts, and she'll have to contact an attorney instead.
Posted: Tue Feb 28, 2012 08:59 am Post Subject:
@ MaxHerr Yes, the paperwork was faxed into the insurance company 1 hour prior to the death of my Dad.
In light of my query, I don't think we ever thought about contesting the beneficiary of the other four or less policies that the estranged wife would get. Thanks for the information in that aspect. We have been trying to 'work' with the latter person and that thought never came up. This whole ordeal has really shown the true colors of character where all is concerned. People get ugly and greedy, so we've seen.
As for sis splitting the benefit, I have nothing to worry about. My sister has always looked out for me and she won't dishonor my Daddy's wishes. And even if she didn't, it wouldn't worry me. The most valuable gift was reconnecting with my Daddy. We'd been out of touch for almost 20 years and I will always treasure the three years we had before his death. You can't buy that with money any day!
Again thanks for your knowledge and time with my questions here on this forum.
Posted: Tue Feb 28, 2012 11:53 am Post Subject:
People get ugly and greedy
Money just seems to bring out the "real person". Just as in sports, if the team pays millions of dollars to an athlete who was a jerk before he was signed to play the game, all the money does is make him a rich jerk.
When the money is given to a person of integrity, like a Michael Jordan, it allows him to continue to do great things, just more of it because of the money.
It's no different in families when money/property is involved. In fact, it may even be worse in some cases.
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