Life Insurance Cashed and Put in New Policy

[dpcl]

What is the name of your state? VA

My father in law was diagnosed with Alzheimer's a several years ago. He has lived with a woman for many years who is his companion but they are not married. He passed away in April 18, 2006. The woman he lived with (B.M.) had Power of Attorney. He also has a son and daughter (my wife).

We have discovered that there were several life insurance policies and an IRA totalling close to $500,000. In March of 2005 all the polices and the IRA were cashed out and put into a new life insurance policy with B.M. listed as the sole benficiary. We don't know for sure but believe the beneficiaries on the polices and IRA that were cashed were his son and daughter. In March of 2005, his Alzheimer's had progress to the point that he was not remembering that you spoke to him the day before. We beleive it was questionable that he knew what he was doing a the time. B.M. filed a claim on the new policy on 4/20/06, the day before he was buried.

Do his children have any recourse to challenge what has been done? He loved his children and grandchildren very much and we don't believe he would have made this choice if he was of sound mind and body. We did expect that he would leave some money to B. M., but not the entire estate.What is the name of your state?

 

[seniorjudge]

What is the name of your state? VA

My father in law was diagnosed with Alzheimer's a several years ago. He has lived with a woman for many years who is his companion but they are not married. He passed away in April 18, 2006. The woman he lived with (B.M.) had Power of Attorney. He also has a son and daughter (my wife).

We have discovered that there were several life insurance policies and an IRA totalling close to $500,000. In March of 2005 all the polices and the IRA were cashed out and put into a new life insurance policy with B.M. listed as the sole benficiary. We don't know for sure but believe the beneficiaries on the polices and IRA that were cashed were his son and daughter. In March of 2005, his Alzheimer's had progress to the point that he was not remembering that you spoke to him the day before. We beleive it was questionable that he knew what he was doing a the time. B.M. filed a claim on the new policy on 4/20/06, the day before he was buried.

Do his children have any recourse to challenge what has been done? He loved his children and grandchildren very much and we don't believe he would have made this choice if he was of sound mind and body. We did expect that he would leave some money to B. M., but not the entire estate.What is the name of your state?

The first thing you must find out is if pa was mentally competent when he gave the power of attorney. If he was, then there is not a whole lot you can do since that is what pa wanted to do and put it in writing.

Hire a local lawyer who is versed in such things to find out for sure.

 

[Betty]

You indicate your father-in-law lived with B.M. for many years & was dx with Alzheimer's several years ago. It is possible he was competent at the time he signed the power of attorney. You would need to know when this was done. You would also need to know for sure who the beneficiaries were before the change made 3-2005 - who he named at the time he was competent. You will need to discuss the situation with a lawyer to see if it is worth pursuing.

 

[dpcl]

Follow-up Questions

I have a couple of follow-up questions:

Let's assume that the Power of Attorney (POA) was given when he was first diagnosed and he was competent and that the IRAs and life insurance policies orginally listed my wife and her brother as beneficiaries:

Does B.M. have the legal right to cash in these policies and IRAs and put everything into a life insurance policy in her name? Would there not have to be some documentation that this was his wish. What about the fact that this was done in March 2005 when it would have been questionable as to his competence? Could'nt this be viewed as abuse of POA?

Are you suggesting that if the beneficiaries were orginally listed as my wife and her brother, we may want to pursue further?

My wife's father was divorced years ago. Should we try to get a hold of the divorce papers to see if they require any life insurance polices to be in the names of the children. If they did have this requirement, would the action she took be a violatio of the court order? Would the life insurance polices have to have been in effect at the time of the divorce?

Can we contest the life insurance policy that lists her as the owner and beneficiary if it has not been paid out yet?

Thanks again for your assistance.

 

[Betty]

If your father-in-law was competent at the time he signed the power of attorney: re B.M. being able to make the changes she did 3-2005, when he was not competent, depends on how much authority was given in the POA. However, if your wife & her brother never were bene(s) on the ins. pols. & IRA, there would be nothing due them anyway. If they were bene(s) previously, changing them by B.M., like I said, depends on whether she had this power. You will need to contact a lawyer. You might want to go ahead & see if the divorcee decree required any ins. policies being taken out listing the children as bene(s) - however, even if this is true, it may not keep B.M. from getting the proceeds on policies she was named bene on. You will need to run this by a lawyer also. You really do need the help of a lawyer to help you sort this all through.

 

[Dandy Don]

You need to be getting an opinion from about 3-4 probate lawyers or business law attorneys or elder care/family law attorneys to find out whether Virginia has any statutes on its law books regarding abuse of power of attorney. A person with Alzheimer's is not considered to have the mental capacity to enter into legal documents, so on that basis alone the POA was obtained fradulently and any transactions that she got money from can be reversed.

You probably will have grounds to sue the witch to get back the monies she stole and your attorney needs to contact the insurance company to get a copy of any beneficiary designation form she may have filled out.

Go get your money!!! If the witch hadn't been so greedy and had left something for the kids, she probably could have gotten away scot free. I'm glad to see you are savvy enough to inquire about what your legal rights are!!

DANDY DON IN OKLAHOMA ([email protected])

 

[Betty]

As I indicated previously & senior judge also, it is possible he was competent at the time he signed the POA - you need to find this out.

 

[Dandy Don]

Discuss his competency with his doctors/physicians.

Do not hire an attorney to handle this for you until they can prove by showing you prior cases that they have won in this same general area.

Your attorney will also need to contact the insurance company immediately to inform them that you are filing a challenge to this policy so that they will not automatically pay out on it, but even if they have paid out you can still sue.

DANDY DON IN OKLAHOMA ([email protected])