Interpleader Lawsuits
We handle cases involving disputed life insurance benefits. We have experience in evaluating and litigating life insurance interpleaders.
Beneficiary contests can be extremely complex. They often involve a mix of state and federal laws. You need a lawyer with substantial experiencing litigating these disputes.
We work tirelessly to fight for life insurance proceeds. The stakes are high. We will thoroughly evaluate your case, develop a strategy, and represent you aggressively to recognize you as the rightful beneficiary on the policy.
The Interpleader Process
When multiple people claim to be the correct beneficiary of a life insurance policy, it can be hard for the life insurance company to determine who it should pay. Insurance companies are often hesitant to pay the proceeds and risk paying the wrong claimant. Instead, insurance companies can file an interpleader lawsuit to have a judge or jury decide.
The law typically favors insurers that file interpleaders. An insurer facing claims to policy proceeds can interplead the funds, name the rival claimants, and be discharged from liability. The insurance company may be able to recover a portion of its legal fees from the life insurance policy. These are very important cases, as the proceeds at issue are often hundreds of thousands of dollars. We have even handled interpleaders as large as $5 million dollars.
Examples of Common Interpleader Cases
There are numerous circumstances that create conflicts and uncertainty regarding the proper recipients of life insurance and account death benefits.
Conflicting beneficiary designations may surface. This can occur when there are multiple beneficiaries named on the policy, or when the beneficiary designation is unclear or ambiguous.
Issues often arise when the policy owner has attempted to change the beneficiary. We see this often. There may be issues regarding whether the attempted change was valid and should be recognized. For example, if the policy owner attempted to change the beneficiary but did not strictly comply with the process outlined in the policy. Or what someone at the insurance company thought was required to designate either a primary beneficiary or a contingent beneficiary.
Claims that the insured attempted to change the beneficiary while lacking the required mental capacity to do so. This can be a particularly challenging issue in interpleader disputes. It is a fact intensive examination. It is very hard for an insurance company to evaluate whether the policy owner had the mental capacity to change the beneficiary. It makes the most sense for the insurance company file a life insurance interpleader and have a court decide the capacity issue.
Claims of undue influence may be raised when there is some evidence that the beneficiary coerced or manipulated the insured into designating them. Undue influence can be difficult to prove, but it can be a reason to overturn a designation when there are signs of duress.
Divorce often creates uncertainty, particularly in cases involving ERISA policies. Texas has a family code provision that may override a beneficiary designation after a divorce. There may be competing claims from a current and ex-wife. A divorcing spouse may be required to maintain life insurance to secure child support. There may also be an issue that the former spouse waived a claim to policy benefits as part of a divorce agreement. Such is an increasing source of litigation.
Community property claims are common, particularly in Texas. Community property is property that is owned by a married couple. In Texas, if a life insurance policy was purchased during the marriage, the proceeds of the policy may be considered community property. If the policy owner dies a community property claim may arise if the spouse is cut out. The surviving spouse may argue that they are entitled to a portion of the life insurance proceeds as community property. A probate court may enforce the obligation.
Contact us for your interpleader action
A legal action can be a scary process. Proceeds may be denied or delayed. This is not the time to hire the lawyer who handles criminal or family law matters. If you are a proper life insurance beneficiary, contact lawyers who regularly handle disputed life insurance claims. You need an interpleader attorney. Call or write us for a free evaluation. The initial consultation is always free. We will help you get paid.
It is important to hire a lawyer early in the process. If you plan to contest a wrongful designation, do so before the proceeds are paid out! Hire a lawyer if you receive a pre-interpleader letter from the insurance company. Or if you have been told by an insurance company that a contest has been asserted. This is specifically true if you are served with an interpleader complaint. Once the interpleader is filed, deadlines begin to run. We have seen numerous reported cases of potential beneficiaries losing their claims because of default judgments.
Consultations are free and confidential.