Can thebeneficiaries of a life insurance policy be contested?

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Can thebeneficiaries of a life insurance policy be contested?

My wife’s dad died almost a week ago. The day after he died his insurance company contacted my brother-in-law and informed him that he and my wife are the beneficiaries on the policy. Their aunt, who is the executor of his estate, said that she is going to contest them being named beneficiaries. The policy was taken out in 2001, the same year their mom divorced him. He was a postal employee and the policy was taken out through his work.

Asked on May 21, 2011 under Estate Planning, Ohio

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Your aunt has no right to challenge who is or is not listed as the beneficiary of this policy.  The fact is that the proceeds of a life insurance policy pass outside of the probate estate, therefore an executor has no authority over this matter. Under the law, an insurance policy is a contract between the owner of the policy and the insurance company that issues it.  Accordingly, the insurer has a contractual obligation to pay the listed beneficiaries, not the deceased's estate (unless it's the beneficiary).

Note:  I there was some indication of fraud or duress exerted upon the insured at the time that they beneficiaries were named, possibly then a claim by the estate could be entertained.  But such does not appear to be the case based upon the facts presented.


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