Interpleader: What it Means to Your Life Insurance Claim–A Life Insurance Interpleader Action is filed when someone has died and there are multiple, conflicting claims on a life insurance policy.

The sad news after you have lost a loved one,  you have a dispute with a family member, or ex-family member, about who is the rightful beneficiary or heir as to the life insurance claim.

Someone else says they, not you, should be the one to get the life insurance benefits –  a former wife or husband, or grown children from a short first marriage. This is a real trauma after the loss of your loved one.  Many times, the life insurance company says it wants to pay the policy proceeds claim, and is ready to pay,  but they can’t to decide who to pay of the adverse claimants.

The insurance provider claims if it pays one party, that the other “legal beneficiary” will sue them. When numerous people are making competing claims for the life insurance policy benefits, the insurance company will usually file a lawsuit against several claimants, and let the Court decide the who is the proper beneficiary. Beneficiary disputes need to be resolved before you can receive your proper claim benefit.

The life insurance company does not want to have excess litigation, so, the life insurance company starts a civil action of a very special and peculiar kind.  It starts an Interpleader action.

What Does Interpleader Mean?

When the life insurance company files an Interpleader, it is giving the Court the power in determining who is the proper beneficiary for the Life Insurance Proceeds.  Once the Court decides, under the law, the life insurance company can’t be blamed.  The Court will supervise the litigation between whoever claims to be proper beneficiaries. It is a lawsuit that you don’t start, but you need to win to be the successful claimant.

How is Your Claim Effected as a Named Beneficiary?

Sometimes, the life insurance contract was updated to show that the new spouse was the person who should receive the benefits.  Sometimes there could be a legal agreement to have some life insurance benefits for a former spouse or another person.  And, we have all heard stories of a distant family member who suddenly appears when someone dies – and who claims to be a primary beneficiary to a life insurance policy. These life insurance disputes need to be taken very seriously.

Last Minute Beneficiary Changes can often raise red flags concerning numerous legal issues:  Life Insurance policy owners generally retain the right to change beneficiaries whenever they choose, however; the policyholder must have mental capacity when the changes are made (have they been forced or coerced into making these changes, and does the insured individual understand these changes?), and the changes must be free of undue influence and duress.

Beneficiary forms can be confusing, not properly received, or numerous  – such as a policy that has been updated a number of times over the last twenty years.

What Is an Irrevocable Beneficiary Designation?

An irrevocable beneficiary designation is one that cannot be changed after it is made.  Whether a beneficiary designation is revocable or irrevocable is a very important part of our analysis of an interpleader situation.  A life insurance attorney can review all the facts to know whether an agreement, contract or prior Court order made a designation irrevocable.

If a Life Insurance Policy Has an Irrevocable Beneficiary Designation?

Determining if there is an irrevocable beneficiary designation is very important.  If there have been changes to a beneficiary designation, if the original beneficiary designation was irrevocable, those changes may not have legal effect.  Whether the changes can be legally enforced, whether in an interpleader or lawsuit, takes a careful review of all the facts.  As life insurance lawyers, we can do this full review.

How Do You Know If the Life Insurance Policy You Have Has an Irrevocable Beneficiary?

The beneficiary designation form should include a clear intent which shows whether the designation is revocable or irrevocable.  Usually, this information is included in the first paragraph of the designation, or close to where the insured person (or owner) signed the beneficiary designation.  A California life insurance lawyer can help you know if the designation is irrevocable or not.

How Do I Know If the Life Insurance Policy You Have as an Irrevocable or Revocable Beneficiaries?

The beneficiary designation form usually states whether the designation is revocable or irrevocable.  An experienced life insurance attorney can review the full factual situation, to see if there is another insurance document, written agreement, or Court order that the designation be irrevocable.  The life insurance lawyer may need additional documents to know if the designation is revocable or not.

Life Insurance Beneficiary Designation for an Irrevocable Trust?

Sometimes, the beneficiary on a life insurance policy is a trust.  A trust that is designed to receive life insurance benefits is usually an irrevocable life insurance trust, or ILIT.  An irrevocable life insurance trust can be an important estate planning tool, especially on large estates, which may have US Estate taxes.   There are other reasons for some people using irrevocable beneficiary designations.

What Is an Irrevocable Beneficiary Designation?

There are two types of beneficiary designations: revocable and irrevocable beneficiary designations.  An irrevocable beneficiary designation cannot be changed.  A designation can be made irrevocable by the terms of the life insurance policy, by contract, or by prior Court order.  Most life insurance policies have revocable beneficiary designations, meaning that the insured person (or life insurance policy owner) can update the designation.  The most recent designation controls who gets the benefits.

What is a Beneficiary Designation for an IRA Retirement Account or Annuity?

A revocable beneficiary designation for an IRA (individual retirement account) is the controlling document, that tells the life insurance company who to pay.  The beneficiary designation is usually done on a form provided by the company.  The life insurance company wants to have additional information on who to pay, so the paperwork is clear.  Whether a beneficiary designation is revocable or irrevocable, the interest of the life insurance company is in having a clear, complete, and signed beneficiary designation.

Beneficiary Designation Received After a Person’s Death

Whether a beneficiary designation signed by the person with the life insurance policy (or the owner) is effective if the life insurance company receives it after the person’s death, is usually decided on the policy language and applicable law.  Beneficiary designations made close in time to a person’s passing raise questions of the person’s mental and physical capacity for making the designation.  Depending on circumstances, the person may have also been more vulnerable to undue influence or duress, too.  Expect there to be some investigation into beneficiary designations received by the life insurance company after the date of death.

Answer to Interpleader Complaint?

Your Answer to an interpleader complaint is a very important document.  Without filing the Answer with the Court, on time, in exactly the right format, the Court will presume that you do not want any of the benefits, and default you.  Especially in Federal Court, the Answer to an interpleader complaint must include all of the admissions and denials, and any other matters that must be brought to the Court’s attention.

Sample Answer to Interpleader Complaint California?

The Answer to an interpleader complaint in California has to follow the Federal Rules of Civil Procedure, and the Local Rules.  We can show you a sample answer, simply request one from our offices.  Each answer must be closely prepared to answer each paragraph of the interpleader complaint.  Each paragraph of the complaint must be answered, admitted, denied, or otherwise plead in the answer.  Additional required allegations may be needed.

Response to interpleader complaint?

The response to an interpleader complaint is an Answer.  An Answer, especially in Federal Court, must comply with all of the applicable Federal Rules of Civil Procedure and Local Rules.  The judge does not want to take the time to teach anyone how to do an answer.

Time to respond to interpleader complaint?

The time to respond to an interpleader complaint depends on the Court but is usually 20 days after you receive it.  This is a very short time.  Additional time may be available.  But it is very important to respond to the interpleader complaint within the permitted time.  The Answer is the basic response that makes the case ready to go forward.

Answer to the interpleader complaint?

The answer to an interpleader complaint is an important document.  Without the answer, the judge won’t be able to order that you receive the benefits.  An answer has to follow all the right rules, and state all the necessary facts, for you to win.  Answers are best done by an experience life insurance attorney.

What is a complaint for interpleader?

The complaint for interpleader is brought by the life insurance company, to get a judge to decide who gets paid the benefits, instead of making the life insurance company decide itself.  It is a complaint because that is the legal word for lawsuit.  A complaint is the document that gets the whole thing going.  You must respond to the complaint in the right way and at the right time or you won’t get paid the benefits, even if you are sure you are the right person who should be paid.

Time to respond to interpleader complaint federal law?

The time to respond to an interpleader complaint depends on the Court but is usually 20 days after you receive it.  This is a very short time.  Additional time may be available.  But it is very important to respond to the interpleader complaint within the permitted time.  The Answer is the basic response that makes the case ready to go forward.

Is Answer in an Interpleader the Same as a Cross Complaint?

An Answer and a Cross-Complaint are not the same things, especially in Federal Court.  Generally, if you only want to dispute the life insurance benefits, and argue that those benefits should be paid to you, not the other people, then an Answer is enough.  If there are closely related legal complaints involving the other people, that may be right to bring in Federal Court, then you may need a Cross-Complaint.  Usually, the Answer legally tells the Court that you seek the life insurance benefits.

What Is a Complaint for Interpleader?

An interpleader basically makes a judge decide who gets the life insurance benefits.  The life insurance company pays the benefits to be held by the Court until the decision is final.  The plus for the life insurance company is that by using an interpleader, the company only has to pay one time and can’t be sued by anyone else for the benefits.  The life insurance company doesn’t have to decide who should receive the benefits if they file an interpleader complaint.

How to Respond to an Interpleader Complaint?

An interpleader complaint is prepared by the attorneys for the life insurance company.  It is often a very precise and detailed document.  In United States District Court, it is important that the response to the interpleader complaint comply with all the Federal Rules of Civil Procedure and all the Local Rules.  You need an experienced Feder Court attorney for your best response to an interpleader complaint.

Rule 22, Interpleader, Federal Rules of Civil Procedure

For Federal Court interpleader, the important Federal Rule is Rule 22: Federal Rules of Civil Procedure, Rule 22 states as follows:

Rule 22. Interpleader

(a) Grounds.

(1) By a Plaintiff. Persons with claims that may expose a plaintiff to double or multiple liability may be joined as defendants and required to interplead. Joinder for interpleader is proper even though:

(A) the claims of the several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or

(B) the plaintiff denies liability in whole or in part to any or all of the claimants.

(2) By a Defendant. A defendant exposed to similar liability may seek interpleader through a crossclaim or counterclaim.

(b) Relation to Other Rules and Statutes. This rule supplements—and does not limit—the joinder of parties allowed by Rule 20. The remedy this rule provides is in addition to—and does not supersede or limit—the remedy provided by 28 U.S.C. §§1335, 1397, and 2361. An action under those statutes must be conducted under these rules.

The Federal Rules are the basic rules for practice in the United States District Courts.

Definition of Interpleader, for United States Federal Courts and State Courts, Pertaining to Life Insurance Benefits?

Interpleader, in the Federal Courts, is defined by Rule 22.  Rule 22 defines interpleader to be when there are claims of several claimants, who are adverse.  Basically, that means if two or more people claim the same life insurance benefits (or other assets) then the Court can be used for an interpleader.   In an interpleader, the Judge, rather than the life insurance company, will ultimately have a trial, and the Judge will decide who receives the benefits.  The life insurance company only pays the life insurance benefits once.

How Life Insurance Companies File an Interpleader Complaint, and What to Do to Answer the Interpleader?

Life insurance companies file interpleaders as complaints, usually in Federal Court, naming everyone who says they should be paid the benefits, as the defendants.  Each defendant needs to answer the complaint, to show that they want to be paid the benefits.  The Answer to an interpleader complaint must comply with all the Court Rules and the Federal Rules of Civil Procedure, if in Federal Court.  The Answer is a legal document, that must be in a very specific legal format, responding to each allegation of the complaint.

The Basics of Interpleader?

An interpleader basically makes a judge decide who gets the life insurance benefits.  The life insurance company pays the benefits into be held by the Court, until the decision is final.  The plus for the life insurance company is that by using an interpleader, the company only has to pay one time, and can’t be sued by anyone else for the benefits.  The life insurance company doesn’t have to decide who should receive the benefits if they file an interpleader complaint.

Interpleaders and ERISA?

Many interpleader cases involve ERISA plans or benefits.  ERISA is the law that applies to many life insurance benefits that come from having a job offering those benefits.  ERISA is a highly specialized law that is supposed to protect employees but is mostly used by big life insurance companies to limit their responsibilities.  If you have benefits under a life insurance policy under ERISA, you and your lawyer need to take special precautions to protect your legal rights.  Waiting until you get into Court can be too late, because ERISA claims and cases are not like typical trials.

California Life Insurance Interpleader?

California Courts also have an interpleader rule, it is not just the Federal Courts.  Many life insurance companies prefer the Federal Courts, rather than the California State Courts, for a variety of mostly outdated reasons.  We handle interpleader complaints and cases in both the Federal Court and the State Court.  In either Courthouse, the judge is empowered to make the final decision on who gets paid the life insurance benefits.

Interpleader Avoids Multiple Liability for Who?

Interpleader law is made to help the life insurance company.  By using an interpleader, the life insurance company prevents multiple people from suing it, trying to get paid the same life insurance benefits.   The life insurance company gets to make a judge decide who gets paid.  The life insurance company also gets out of the case right away, so it doesn’t have to even concern itself with who gets paid.

Interpleader Law.  What do you need to Know?

Know this about interpleader law.  You need to respond to the interpleader complaint.  Your response needs to be done in just the right way, by the right time.  Even if you know that you are the only one who should be paid the benefits, you need to act to protect your rights in Court.  A life insurance lawyer can help to be sure you get justice.

Interpleader is a Very Serious Matter for Life Insurance Beneficiaries.

The judge is going to decide, or there is going to be a trial to decide who gets the policy benefits. If you don’t have the right lawyer, a lawyer who knows these insurance cases backwards and forwards, who is able to find and present the strongest evidence in your favor, you will lose.    These cases are often brought in Federal Court, the United States District Court.  You really need an experienced life insurance lawyer who knows the complicated court rules of Interpleader actions and dealing with multiple claims.

With us, at LifeInsuranceLawyerNOW.com and LifeInsuranceJustice.com, and Joseph S. Fogel as your experienced life insurance attorney, we will do everything we can to get you paid, as the victor in an interpleader proceeding.

Call us now at (888) 997-4070  to speak with a competent life insurance attorney now.  We won’t shuffle you off to paralegals and assistants.  You can get your questions answered in a free consultation by a knowledgeable life insurance lawyer.  You can email us, at info@lifeinsurancelawyernow.com or use the form on this site.  We offer a free no-cost consultation, phone consultation, and generally work on a contingency basis, so you do not have to pay anything unless we recover for you.