Life insurance interpleader lawsuits
We routinely handle life insurance beneficiary disputes. These disputes arise when multiple people claim they should receive the life insurance benefits. The specific nature of the claims vary. Sometimes there are claims that a life insurance beneficiary designation is not valid, because of lack of mental capacity, undue influence, fraud or forgery. There may be claims that the designation form was not completed properly. And beneficiary designations may be subject to spousal claims and divorce issues.
We often can resolve these disputes for our clients without the need to go to court. But sometimes it is necessary for a court of law to decide who gets the benefits. This is typically resolved via a life insurance interpleader lawsuit.
The Interpleader Process
A life insurance company will file an interpleader lawsuit when it receives multiple and competing claims to the life insurance benefits. The life insurance company will file a lawsuit and name the competing claimants as defendants. They are not being sued because the insurance company wants them to pay money. Instead, the law requires the insurance company to sue and serve the competing claimants so they will come to the court.
What is the benefit to the insurance company? The interpleader process releases the life insurance company from any possible liability for paying the wrong person. The court may also award the insurance company a portion of its attorney’s fees in bringing the interpleader case.
What if I don’t hire a lawyer and appear in the case?
Sometimes claimants ignore the interpleader suit. When that happens, the court will usually grant a default judgment. In other words, the party who does not appear will lose. They say half of life is showing up, and the party who shows up will get all of the life insurance money. I’ve seen this happen multiple times.
The result usually isn’t much better if one of the claimants appears, but without a lawyer. Such “pro se” representation is never a good idea. Apart from not knowing the law very well, non lawyers are likely to lose because they do not understand the procedural rules of litigation.
What if I don’t hire a lawyer experienced in life insurance interpleaders?
It is extremely important to hire a lawyer experienced in life insurance interpleaders. Doing so is crucial for ensuring that your rights are protected and that you have the best chance of securing the benefits:
Understanding the Complex Legal Framework:
Life insurance interpleaders involve complicated laws and regulations governing beneficiary designations, contractual obligations, and procedural requirements.
An experienced life insurance lawyer knows how to navigate these complexities
Expertise in Evidence and Strategy:
Many interpleader cases hinge on proving facts like the validity of a beneficiary designation or evaluating allegations such as undue influence, lack of capacity, or fraud.
An experience insurance attorney knows how to gather and present compelling evidence, including medical records, expert testimony, and financial documentation, to strengthen your case.
Negotiation Skills for Resolution:
Many can be resolved through negotiation or mediation. You obtain valuable leverage if the other side knows you have hired a lawyer with substantial experience in life insurance lawsuits.
An experienced lawyer can advocate on your behalf during these discussions, potentially avoiding a prolonged and costly court battle.
Protection Against Procedural Pitfalls:
Courts have strict procedural rules that must be followed, from filing deadlines to rules of evidence and discovery.
A non-lawyer—or even an inexperienced lawyer—can easily make mistakes that result in losing the case.
An experienced interpleader attorney ensures compliance with all procedural requirements, keeping your case on track.
Maximizing Your Recovery:
Without legal representation, you may not fully understand the value of your claim or how to position it effectively in court.
An experienced lawyer can work to maximize the amount you recovery in the case.
Minimizing Stress:
Interpleader lawsuits can be emotionally taxing, particularly when they involve disputes with family members or others close to the deceased.
A lawyer familiar with these cases can handle the legal burden, allowing you to focus on healing and moving forward.
Courtroom Experience:
If the case cannot be resolved outside of court, you need a lawyer who is comfortable and skilled in litigation.
An attorney with interpleader experience will know how to present your case persuasively to the judge and argue effectively against opposing claims.
When it comes to life insurance interpleaders, the stakes are high. The lawyer who handled your brother’s divorce or your cousins DUI is likely not the right choice. Hiring an attorney who specializes in this area gives you the best chance of a favorable outcome. Their expertise can mean the difference between winning your rightful share of the life insurance benefits and walking away with nothing.
Call attorney J. Michael Young at (800) 323-1857.