It is possible to contest the beneficiary of a life insurance policy after the death of the insured in a variety of situations. Here are some ways in which a life insurance beneficiary can be challenged.
Grounds to Contest a Life Insurance Beneficiary
- Forgery. This is the easiest and most straightforward way in which to contest the life insurance beneficiary designation. If an unscrupulous family member, neighbor or caregiver obtains a form to change the beneficiary designation and simply forges the signature of the policy owner, the change is null and void – even after the life insurance death benefit is paid out. Of course, the forgery has to be pretty blatant to be successful. We have seen numerous instances where potential litigants insist that a signature is a forgery, but where it is not obvious to us.
- Lack of Capacity. In order to effectuate a change to a beneficiary designation on a life insurance policy, the owner of the life insurance policy must have the mental capacity to make the change. If the owner of the policy did not have capacity, the change to the beneficiary designation can be undone. Of course, a fairly high level of proof will be required. It is difficult (although not impossible) to claim lack of capacity without a prior diagnosis of dementia or similar disease of the mind.
- Undue Influence / Fraud / Trickery. A change to the beneficiary designation can be undone if undue influence, fraud, or trickery can be established. This is the category where we see the largest number of potential challenges to life insurance beneficiary changes. In a typical case, the life insurance policy is left in equal shares to the owner’s children. Due to the unscrupulous acts of one of the children, that child, through coercion, is able to force the owner to make a change.
- Divorce. Even if the beneficiary designation lists an ex spouse as the beneficiary, the laws of many states will treat the ex-spouse as having already passed away, nullifying the beneficiary designation in favor of the ex-spouse. For example, Florida law, at Section 732.703, cancels many of the beneficiary designations on non probate assets such as life insurance that still name the ex-spouse as the beneficiary.
- Slayer Statute. If the named beneficiary kills the insured person, the beneficiary is not entitled to receive the insurance death benefit. For example, Florida law, at Section 732.802(3), provides as follows: “A named beneficiary of a bond, life insurance policy, or other contractual arrangement who unlawfully and intentionally kills the principal obligee or the person upon whose life the policy is issued is not entitled to any benefit under the bond, policy, or other contractual arrangement; and it becomes payable as though the killer had predeceased the decedent.”
- Unjust Enrichment. In rare situations, if someone pays of the premiums on the life insurance policy and is “supposed” to be the beneficiary of the policy but for some reason is not, the law of unjust enrichment can assign the death benefits to the person who paid for the policy. For example, in the case of Kowalski v. Jackson National, from the Southern District of Florida, the death benefit was directed in favor the person making the premium payments under an unjust enrichment theory.
