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Contesting sole beneficiary??? law suit

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MtnsNC

Junior Member
What is the name of your state? NC

My mother is the sole beneficiary of my father's life insurance policy. They bought it together when they were married. They were married 25 years and then divorced in 1999. My mother was his 2nd wife. He has 2 children by his first wife. My father never remarried before his death. He died of natural causes recently.

My mom was notified the life insurance co that she was the sole beneficiary. Apparently this caused an uproar with his children from his first marriage ( they thought they were the beneficiaries along with my brother and I). My mom then got a letter from the life insurance co that there has been a protest agst the claim and the $$ will be held for 30 days. They will released it to the beneficiary listed unless legally stopped.

My mother found out that a law suit was filed. She called the life insurance co and they said that it will now goto the legal dept and some sort of inner counsel. They told her she didn't need a lawyer just yet.

My question is can the insurance co make a decision and give the money to the sole beneficiary. Basically, the beneficiary has never been changed. My father had 9 years post divorce to change it and he didn't. How long can this drag out and will we have to goto court. I guess I am wondering what the procedure is in a black and white case like this. Which stage can the law suit be dismissed?

My mother lost my father's pension with his death, so this $$ and ss is all she's got.

Thank you for any information
 


las365

Senior Member
My mother found out that a law suit was filed. She called the life insurance co and they said that it will now goto the legal dept and some sort of inner counsel. They told her she didn't need a lawyer just yet.
Your mother should not take legal advice from an insurance company representative. How did she find out about the lawsuit? Has she been served? Is the "lawsuit" the filing of probate of your father's Estate? Did your father have a Will?

Your mother should seek advice from a probate attorney.
 

MtnsNC

Junior Member
She found out about the lawsuit when she called on the last day of the 30 day period to see what was going on with the claim.

So she hasn't officially been served, but it is on its way. There was a will and the life insurance was not listed. What does probate have to do with it, I thought life insurance fell outside of probate?

Thank you for your help.
 

las365

Senior Member
What does probate have to do with it, I thought life insurance fell outside of probate?
Oh, I think you are right. Sorry, obviously I haven't had enough coffee this morning!

She still needs to talk to an attorney about the laws that apply and her options. Sooner rather than later, so she can start getting her plan together before she is under the gun to get an Answer filed.
 

MtnsNC

Junior Member
Would it be her having to get an answer together or the life insurance co? I am totally new to the legal/life insurance process. Thank you for your patience.

What I am confused about is what point does my mom to prove if she is the sole beneficiary on the life insurance?
 

las365

Senior Member
I'm not a lawyer and I don't want to misinform you - I already have one strike this morning!

It is my understanding that in some states, divorce affects the beneficiary status of the ex-spouse/beneficiary in a life insurance policy.

Who has to answer the lawsuit will depend on who is named as defendant(s). What your mother has to prove or defend will be based on the allegations in the suit and whether she is a named party, or intervenes in the suit.

The insurance carrier's interest is its own interest, not your mother's. She really should talk to a lawyer to obtain a full understanding of the legal aspects of her situation.

Other people will be along here and I hope they can of more help to you than I can. But while a message board can be very helpful for general information, it is no substitute for the advice of counsel.
 

MtnsNC

Junior Member
Thank you for your help! I appreciate any input. Right now, we are at the collecting information phase and I am hoping this forum will give me some generalized info. on what to expect and what we need to do.
 

Betty

Senior Member
I worked at a major ins. co. for many years. The ins. co. pays the policy proceeds to the beneficiary listed in the policy unless another party contests the payment before it is paid out. They then do what their legal dept. says - it is usually go ahead & pay it to the bene in the policy unless a lawsuit has been filed. If a lawsuit has been filed, the money is held (normally by the court - sometimes by the ins. co.) until the judge makes a decision as to who should get the proceeds. Just because family members have filed a lawsuit doesn't mean they will win. If the insured wanted someone else to be bene, it is normally taken to be their responsibility to change the bene when there is a divorce. Your mother will need to get a lawyer *if & when* it goes to court. Of course, she can talk to a lawyer now if it would make her feel more comfortable. Life ins. does pass outside the estate & goes to the bene named in the policy - not that someone cannot contest payment..
 

MtnsNC

Junior Member
Betty,

Thank you for your post. I have a few more questions for you.
The claims examiner that my mother talked to said a law suit has been filed and it will goto the legal dept. Now, since the law suit is filed by children of the 1st marriage agst the life insurance co. , will the next always be the courts? I'm just surprised that when there is a clear beneficiary that insurance co won't give the proceeds to that beneficiary. I thought it only went to interpleader action only if the life insurance co. couldn't determine who the beneficiary was.

Do they have a certain length of time before they are suppose to get back to my mother. I am also wondering is there something we can do to be repaid for all the legal fees we are going to incur from this IMHO frivolous law suit.


Thanks for your help.
 

Betty

Senior Member
Betty,

Thank you for your post. I have a few more questions for you.
The claims examiner that my mother talked to said a law suit has been filed and it will goto the legal dept. Now, since the law suit is filed by children of the 1st marriage agst the life insurance co. , will the next always be the courts? I'm just surprised that when there is a clear beneficiary that insurance co won't give the proceeds to that beneficiary. I thought it only went to interpleader action only if the life insurance co. couldn't determine who the beneficiary was.

Do they have a certain length of time before they are suppose to get back to my mother. I am also wondering is there something we can do to be repaid for all the legal fees we are going to incur from this IMHO frivolous law suit.


Thanks for your help.
If a lawsuit has been actually filed against the ins. co., (the ins. co. has been sued) they will most likely have to go to court unless something can be worked out before the court date between the ins. co. lawyers & the childrens' lawyer. (ie the children back down believing they have no case for the money after all) If the lawsuit is just against the ins. co. & not your mother, she shouldn't have to go to court & may not end up with any court costs or lawyer fees. She really doesn't need to get a lawyer & could save money by not if she herself isn't sued - it's just whether she would feel more comfortable about the situation by talking to one. The ins. co. will use their own lawyer in court. I know you think the ins. co. should just pay the money to your mother as named bene but they *probably* won't pay it to anyone until the lawsuit is settled. An ins. co. cannot just ignore a lawsuit. It's hard to say how long it will be before a decision re the proceeds is made.
 

MtnsNC

Junior Member
Thank you for your response.

I feel better about the situation already. I can't even imagine what kind of evidence the law suit is based on. I will definitely post as soon as I find though.

Do you know what type of lawyer we should be contacting?

Thanks for your help.:)
 

Betty

Senior Member
I think a "general practice" lawyer could handle this. If you want a lawyer that works specifically with ins. law, you can check the phone book for one or contact your local bar assoc. for a reference. Good luck to your mother. I would put my bet on her getting the money but nothing in regard to a lawsuit is 100% positive. That's why the ins. co. *probably* won't pay the proceeds to her until the lawsuit is settled. If they paid your mother & it went to court & the judge for some reason (always a *slight* chance they might) decided the money should go to the children, the ins. co. would have a problem since they already paid it to your mom. They are just protecting theirself if they wait on paying out the proceeds.
 

Dandy Don

Senior Member
She should be looking at a copy of her divorce decree to see if there was any mention in the decree of her being denied or prohibited from receiving the life insurance benefits. She truly needs to ask her attorney to consult North Carolina law to see whether her status as a divorcee would affect the outcome here, although I doubt it would, except in the event that the insurance company may decide to pay the money to the estate, in which case she needs to find out if she would be considered a heir or not in an intestate probate proceeding. It is questionable whether she would be considered as a surviving spouse, in view of the divorce. A business law attorney or probate attorney can provide insight here.
 

Betty

Senior Member
At the co. I worked at just putting something in the divorce decree that the ins. proceeds would not go to the bene in the policy would not be enough. He would have had to send in a change of bene form to the ins. co. (I don't think I saw one case anyway where it was changed in the divorce decree but a form not sent in to change it in the policy) If the children would not have contested, the ins. co. wouldn't even have known there was a divorce & would have automatically paid the proceeds to the bene named in the policy. The children would then (if the ins. co. had already paid out the benefits to the bene in the pol. before anyone contested) would have had to sue the OP's mother to try & get the money -- not that they would get it. Our court cases always went to the bene in the policy - however, no one can say for sure what a judge will decide. Usually if there is anything in the divorce decree re ins. proceeds, it's that the insured needs to continue ins. on the ex-spouse. However, the OP's mother can certainly look at the divorce decree & see if there is any mention of life ins. It seems she would have known if there was. We certainly wouldn't have paid the proceeds to the children of a 1st wife when there was a 2nd wife named bene divorced or not & the children aren't minors. I don't see the co. paying the money to the estate - we wouldn't as long as there was a bene named & alive -- ins. passes outside the estate.

OP - I'm just going by what I know & from what the co. I worked at & the companies we did reinsurance with (all major cos.) would do & how our court cases ended up -- I can't say with a 100% guarantee though what will happen in your mother's situation.
 
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MtnsNC

Junior Member
Thank you for your input. I am learning a lot about the process. I am thankful because we would be completely in the dark otherwise. If I didn't understand this process....I think I would be more stressed.

I'm not sure if you can answer this question, but is there a certain length of time the insurance co has to respond to the beneficiary after a claim is filed, even if a lawsuit is involved; to let them know what is going on?

I really appreciate your help. I'm glad I found this forum!
 

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