Life Insurance Beneficiary Disputes – Complete Guide

Life insurance is meant to provide peace of mind and financial protection for families. But when multiple people claim the same policy, what should be a straightforward payout can turn into a complicated legal battle. These life insurance beneficiary disputes often lead to lawsuits, probate hearings, or federal court litigation.

If you are involved in a life insurance beneficiary dispute, the Law Offices of Jason Turchin may be able to help. We represent families nationwide in cases involving disputed life insurance benefits.

Why Do Beneficiary Disputes Happen?

Beneficiary disputes arise for many reasons, including:

• Ex-spouses vs. current spouses – A former spouse remains listed as beneficiary despite a divorce.
• Children vs. new partners – Children from a first marriage dispute benefits with a new spouse or partner.
• Last-minute beneficiary changes – Alterations made shortly before death, sometimes under questionable circumstances.
• Power of attorney issues – Beneficiaries changed by someone acting under power of attorney, raising questions about validity.
• No beneficiary listed – Proceeds default to the estate, triggering probate disputes.
• Court-ordered coverage – Divorce decrees requiring life insurance for ex-spouses or children.

What Is an Interpleader Lawsuit?

When insurers face competing claims, they often file an interpleader lawsuit.

• The insurer deposits the money with the court.
• All potential beneficiaries are named as defendants.
• The court decides who is legally entitled to the money.

These lawsuits are common in federal courts when beneficiaries live in different states or when the policy is governed by ERISA.

[Read more about interpleader lawsuits →]

Divorce and Life Insurance Disputes

Divorce is one of the top causes of life insurance conflicts.

• Some states automatically revoke an ex-spouse as beneficiary after divorce.
• ERISA-governed employer plans usually still pay the listed beneficiary, regardless of divorce.
• Divorce decrees may require life insurance for alimony or child support.
• New spouses often challenge designations that favor an ex-spouse.

[Learn more about divorce and life insurance beneficiaries →]

Probate and No Beneficiary Disputes

If no beneficiary is listed, or if the named beneficiary has died, the proceeds usually go to the insured’s estate. This often means:

• Probate court decides how the money is distributed.
• Estate creditors may try to claim a share.
• Heirs may fight over entitlement.

These disputes are particularly stressful because they involve both probate law and life insurance law.

[See what happens if no beneficiary is named →]

Common Types of Beneficiary Disputes

Current vs. Former Spouses

One of the most frequent disputes. Ex-spouses often remain listed because policies weren’t updated.

Children from Different Relationships

Children from prior marriages may challenge new beneficiary designations.

Sudden Beneficiary Changes

Changes made close to death may raise concerns of undue influence, fraud, or incapacity.

Beneficiary Minors

When children are named as beneficiaries, guardianship or trusts may be required, leading to court involvement.

How Beneficiary Disputes Affect Families

These disputes can cause:

• Long court delays before payment
• Stressful family conflicts
• Reduced payouts if attorney’s fees are deducted from the policy
• Financial strain while waiting for resolution

How an Attorney May Help in Beneficiary Disputes

A life insurance attorney may:

• Represent you in interpleader lawsuits
• Challenge or defend last-minute beneficiary changes
• Argue for enforcement of divorce decree provisions
• Protect minor beneficiaries in probate court
• Negotiate settlements to avoid prolonged litigation

Example Situations

• A widow and an ex-wife both claim the policy after the insured failed to update designations.
• A child challenges a last-minute change naming a new partner as sole beneficiary.
• A policy with no listed beneficiary defaults to the estate, and creditors try to claim it.

Frequently Asked Questions

What happens if more than one person claims life insurance?
The insurer usually files an interpleader lawsuit so the court can decide.

Does divorce automatically remove an ex-spouse as beneficiary?
It depends on state law and whether the policy is private or governed by ERISA.

What if a beneficiary change was made under suspicious circumstances?
The change may be challenged for fraud, undue influence, or lack of capacity.

Do beneficiaries have to share the money?
Not unless the court orders it. Sometimes settlements divide proceeds among claimants.

How long do beneficiary disputes take?
Cases may last months to years, depending on complexity.

Contact a Life Insurance Attorney for Beneficiary Disputes

If you are facing a life insurance beneficiary dispute or interpleader lawsuit, the Law Offices of Jason Turchin may be able to help. We represent clients in state and federal courts nationwide. Our cases are handled on a contingency fee basis — meaning you pay no fees or costs unless we recover compensation for you.

📞 Call 800-337-7755 today or start a live chat for a free consultation.