When it comes to life insurance policies, it’s important to make sure that the beneficiary you have designated is the person you truly want to receive the death benefit. Unfortunately, there are situations where someone may use undue influence to change the beneficiary of a policy without the policyholder’s knowledge or consent. In this blog post, we will discuss what undue influence is, how it can be used to change a life insurance beneficiary, and steps you can take to protect your beneficiary designations.
What is Undue Influence?
Undue influence refers to the use of coercion, manipulation, or pressure to force someone to make a decision that they would not have made otherwise. This can include threats, emotional manipulation, or even physical force. In the context of life insurance beneficiary designations, undue influence can be used to convince a policyholder to change the beneficiary on their policy to someone other than their intended recipient.
How Undue Influence Can Affect Life Insurance Beneficiary Designations
There are several ways in which undue influence can be used to change a life insurance beneficiary designation. Some examples include:
- A caregiver convincing an elderly policyholder to change the beneficiary on their policy to themselves.
- A spouse or partner convincing the policyholder to change the beneficiary on their policy to them, even if the policyholder had previously designated someone else.
- A family member or friend convincing the policyholder to change the beneficiary on their policy to them, with the promise of taking care of the policyholder’s needs or debts.
These are just a few examples of how undue influence can be used to change a life insurance beneficiary. In each case, the policyholder may not have made the decision to change the beneficiary if they had not been subjected to undue influence.
Protecting Your Beneficiary Designations
To protect your life insurance beneficiary designations from undue influence, there are several steps you can take:
- Review your policy regularly: Review your life insurance policy regularly to make sure that the beneficiary designated is still the person you want to receive the death benefit.
- Keep your policy in a safe place: Keep your life insurance policy in a safe place where it cannot be tampered with or accessed by someone who may try to change the beneficiary.
- Be cautious of anyone trying to convince you to change your beneficiary: If someone is trying to convince you to change your beneficiary, be cautious and consider seeking legal or financial advice before making any changes.
- Keep records of your beneficiary designation: Keep records of your beneficiary designation, such as a copy of the policy or a letter from the insurance company, in a safe place.
- Review your beneficiary designations with your attorney or financial advisor: Review your beneficiary designations with your attorney or financial advisor to ensure that they align with your overall estate plan.
Texas Case Law
Cobb v. Justice is a case from the Texas Court of Appeals in 1997. The case dealt with the issue of undue influence in relation to a life insurance beneficiary designation.
The facts of the case are as follows: The deceased, Mr. Cobb, had named his second wife, Mrs. Justice, as the primary beneficiary of his life insurance policy. Mr. Cobb’s children from his first marriage challenged the beneficiary designation, alleging that Mrs. Justice had exerted undue influence over Mr. Cobb to obtain the designation.
The court found that there was evidence that Mrs. Justice had exerted undue influence over Mr. Cobb to obtain the beneficiary designation, including evidence that she had isolated Mr. Cobb from his children, had control over his financial affairs, and had coerced him into changing the beneficiary designation.
The court ultimately held that the beneficiary designation was invalid due to the undue influence exercised by Mrs. Justice, and the children were awarded the life insurance proceeds.
The case highlights the importance of considering potential undue influence when a beneficiary designation is challenged in court. It also serves as a reminder that life insurance proceeds can be affected by the actions of the beneficiaries.
Conclusion
Undue influence can be a serious problem when it comes to life insurance beneficiary designations. By being aware of the ways in which undue influence can be used to change a beneficiary, and taking steps to protect your designations, you can ensure that your intended beneficiary will receive the death benefit from your life insurance policy. Remember to review your policy regularly, keep it in a safe place, be cautious of anyone trying to convince you to change your beneficiary, and review your designations with your attorney or financial advisor.
Do you need to hire an Experienced Probate Attorney to help?
When it comes to estate planning, it is important to make sure that your beneficiary designations are up to date and that you have named someone you trust to handle the money in the event of your death. An experienced probate attorney can help you make sure that your life insurance policy is properly structured and that your beneficiaries are able to receive the money from the policy in accordance with your wishes.
Call us today for a FREE attorney consultation at (361) 502-4240.
