Ex husband as sole beficiary

[chethead]

Hello -

We live in Wisconsin. My mother in law passed away about a month ago. When making funeral arrangements, the funeral home said they could place a claim against the $25,000 policy she had to pay for the funeral and then disburse the rest of the money. Relieved, we agreed, as we did not have the $10,000 for the funeral. The funeral home made the claim and said it would take a week or two to find out exactly who the beneficiaries are (there are 4 children and original husband died many years ago). We recently found out that the mother in law left her ex husband as sole beneficiary. Policy was started in 1996 and divorce was in 1998.

According to divorce decree, all life insurance is mother in laws. We have been told the insurance company is making good faith attempts to contact her ex who has spent years living "off the grid" as I think he may have financial problems he tries to avoid. I don't understand why he needs to be contacted, as the decree states it isn't going to be his money anyway. Both the funeral home as well as the lawyer we retained said we should try to contact the ex but I am skeptical.

My wife and I are currently on the hook to pay for the funeral. We are fairly certain the ex will create a stink if he believes he is entitled money and would rather not contact him but can probably do so if necessary. Is it in our best interest to contact him? We really just want to make sure the funeral is paid for but also feel he doesn't deserve a dime.

If we don't contact him, how long does the insurance company try to contact beneficiary before crediting mother in law's estate?

Thank you for your time

 

[ShyCat]

As I understand it, the divorce decree made your mother the owner of the life insurance policy. (It wouldn't make sense for the court to order the beneficiary to be herself.) As the owner, she had the right to change the beneficiary (unless otherwise barred from doing so by the court). She failed to do so, so the insurance company is properly looking for the named beneficiary.

 

[LdiJ]

As I understand it, the divorce decree made your mother the owner of the life insurance policy. (It wouldn't make sense for the court to order the beneficiary to be herself.) As the owner, she had the right to change the beneficiary (unless otherwise barred from doing so by the court). She failed to do so, so the insurance company is properly looking for the named beneficiary.

Yep...she could and should have changed the beneficiary and did not. As the owner of the policy she had the right to do that. That would generally indicate to a court that she intended for her ex husband to remain the beneficiary, which means that it would be harder than heck for an insurance company to pay the money to anyone other than him.

Its a really unfortunate situation.

 

[chethead]

It is very unfortunate. Just another thing she neglected to do that we have to suffer with.

Thank you both for your interpretation. Those were my beliefs as well. I just can't figure out if it makes sense for us to try to contact this guy or not. I believe the insurance company will have a difficult time as everything he buys is put in the name of his daughter with a different surname. I am guessing we might as well try to contact the ex husband and hope he is decent enough to pay for the funeral - would you agree?

Thank you

 

[Dandy Don]

Did mother-in-law leave no last will and testament and is it true that she has no other assets that need to be probated that would help pay the funeral expense and other outstanding debts?

Please discuss this situation with a business law attorney who specializes in insurance interpleader actions to see if you have any options to pursue. If it would be to your advantage according to Wisconsin state law for an attorney to represent you, your attorney might be able to ask that this case be decided by a jury in an interpleader action if no definitive decision can be made about who the beneficiary is, or could find out whether your state law would permit any type of remedy that would benefit you even if the designation wasn't changed correctly. Very difficult to believe that insurance companies with multimillion dollar assets won't spend $200 to pay a private investigator to locate a beneficiary or they choose not to subscribe to very easily discovered nationwide databases that can search for people with a name, date of birth and SSN! You should offer to pay the private investigator yourself to find the ex and get this situation over and done with, and let's hope he will be reasonable enough to want to help pay the funeral expense.

 

[LdiJ]

Did mother-in-law leave no last will and testament and is it true that she has no other assets that need to be probated that would help pay the funeral expense and other outstanding debts?

Please discuss this situation with a business law attorney who specializes in insurance interpleader actions to see if you have any options to pursue. If it would be to your advantage according to Wisconsin state law for an attorney to represent you, your attorney might be able to ask that this case be decided by a jury in an interpleader action if no definitive decision can be made about who the beneficiary is, or could find out whether your state law would permit any type of remedy that would benefit you even if the designation wasn't changed correctly. Very difficult to believe that insurance companies with multimillion dollar assets won't spend $200 to pay a private investigator to locate a beneficiary or they choose not to subscribe to very easily discovered nationwide databases that can search for people with a name, date of birth and SSN! You should offer to pay the private investigator yourself to find the ex and get this situation over and done with, and let's hope he will be reasonable enough to want to help pay the funeral expense.

Dandy Don, its only a 25k policy. There comes a point where legal actions can cost more than the policy is worth. A jury trial could easily be one of those points.

Insurance policies pass outside of estates so they cannot be claimed by creditors of the estate.