Contingent Beneficiary

[xoomer]

Hawaii

My friend is named as a contingent beneficiary on a Prudential life insurance policy behind a beneficiary which is a trust. The owner of the insurance policy recently died and the trust cannot be found so my friend would like to collect the proceeds of this policy. However, her attorney is telling her that it would be better to have the money transferred to escrow and then to attempt to collect from there. My friend is hesitant to do this since she thinks it will just increase her legal fees and she should be able to collect directly from Prudential.

I have a couple of questions: 1) is there a time limit or some legal standard to determine that if a beneficiary cannot be located the contingent beneficiary will be given the money? 2) does it make sense to transfer the money to escrow instead of trying to force Prudential to pay directly?

There will be some opposition to her getting the money from the relatives of the people who were supposed to have been named in the trust which can't be found.

Thanks for any insight.

BruceWhat is the name of your state (only U.S. law)?

 

[anteater]

No idea what the attorney means by an escrow.

I suspect Prudential will do an interpleader action, asking a court to decide.

 

[Betty]

I agree with anteater. It's doubtful the ins. co. will pay the money (proceeds) to your friend. It will probably end up going to court &
the judge will decide who is entitled to collect the proceeds.

 

[xoomer]

Thanks

It makes sense that Prudential doesn't want to get in-between the two parties. That's probably what the attorney was talking about but may not have explained in a way that my friend understood.

Thanks a lot anteater and Betty for the replies--this is always a great place to get legal insight.

 

[Betty]

You're welcome.

 

[xoomer]

Follow-up

It appears that there will be an interpleader action in New York now. The policy is for $120k and the attorney my friend talked to in NY wanted to do the case on a contingency basis for 1/3 of the amount he wins. This sounds quite high to me; is this type of case so complex that a $40K fee is required?

Thanks...

Bruce

 

[tranquility]

Since the trust is the beneficiary, I think the litigation may be difficult if anyone else claims the funds. If not, it should be easy.

Has anyone disputed who owns the funds besides the insurance company?

 

[xoomer]

The defendants are:
1. the sister of the deceased--who is an attorney--as representative of the deceased estate
2. another person, as trustee of a different trust--which was not named as a beneficiary
3. and my friend.

Thanks,

Bruce

 

[OHRoadwarrior]

I would discuss this with more than one attorney. My family had some estate issues develop in he US due to fraud. The attorney quotes and required labor they claimed, ranged in price from a few thousand to well over $10,000. You can probably find a competent attorney to handle this for a fraction of that.

 

[tranquility]

The beneficiary is not cut out of the case. Even if trust documents are not found do not mean there was not a trust.

I think this will be harder than it looks. At the end of the day, lawyer/sister will probably get the OP to negotiate a settlement amount. I might see what an offer of a few thousand dollars buys the OP. If he can settle for $39K (or less), he comes out ahead of where he could ever hope to be in litigation.

 

[Betty]

I would discuss this with more than one attorney. My family had some estate issues develop in he US due to fraud. The attorney quotes and required labor they claimed, ranged in price from a few thousand to well over $10,000. You can probably find a competent attorney to handle this for a fraction of that.

I agree that it wouldn't hurt to run this by more than one attorney just for their opinion on cost & go from there.