What Is Interpleader Law? Why Am I Being Sued In And Interpleader Lawsuit?
Written by Christopher J. Brochu
Interpleader lawsuits are fancy legal words with a straightforward explanation. Interpleader is a civil device that allows the life insurer to initiate a lawsuit against all known potential beneficiaries, naming each as a defendant, to compel two or more parties to litigate a life insurance dispute over life proceeds. In a case of multiple beneficiaries, life insurance companies may opt for an interpleader lawsuit or to pay a party it believes is entitled. There is a particular situation that a life insurance company wants to avoid, and therefore, decides to use an interpleader lawsuit. In some instances, life insurance companies file interpleader lawsuits as a tactic to avoid double liability. Filing an interpleader lawsuit relieves the life insurance company of liability and puts the burden on the court system to determine the owner of the life policy funds and laws eligible to the beneficiaries. Rather than taking the risk of payment of funds to the wrong individual, the life insurance company will file a lawsuit against all possible beneficiaries and submit the funds to the court, forcing the court to be responsible to determine, and then pay, the proper beneficiary(s).
It may be crucial to have a life lawyer, in an interpleader case or interpleader dispute. There are many instances where an individual may not be able to represent themselves, including in the same manner of an experienced life lawyer. Some examples of why an interpleader lawsuit is filed:
- Beneficiary Designation Error: Where the is no designated beneficiary on file for the life policy, whether: failure to comply with the life insurance company beneficiary change rules; policy owner expressed intent to change beneficiaries on the policy and filled out the necessary documents but passed away before properly submitting the beneficiary forms to the life insurance company.
- Children from different Marriages: Children from different marriages that ended in divorce and the insured was required to keep those children on the same life insurance policy, may end up in an interpleader lawsuit.
- Divorce: The owner of the life policy, living spouse and ex-spouses make a claim for the policy proceeds. The owner of the policy never changed the beneficiary designation after their divorce and lives in a state that requires “Automatic revocation upon divorce” and the law determines who is entitled to proceeds.
- Same claim: The owner of the life policy specified that 100% percent of the proceeds go to a particular beneficiary and 100% to another life beneficiary. Both beneficiaries will need legal representation to litigate the interpleader dispute where percentages are unequal.
- Undue influence: The insured changed their beneficiary several days before their death. The timing of this meeting with another person raised suspicions of undue influence or there is reason to believe the mental capacity of the insured was low, causing a change to be made to their life policy.
It is important to have a lawyer representing you if you are involved in an interpleader lawsuit because the life insurance company has hired dedicated lawyers to protect its interests. If there are other parties involved, the other interpleader parties will likely hire a lawyer. Another reason to seek legal counsel is that life insurance companies will often seek legal fees and costs from the interpleader proceeds, and the life insurance attorneys’ drain funds even further from beneficiaries. Litigating an interpleader case alone is lawful, but it may seem like bringing a knife to a gun fight. When it comes to certain legal situations involving interpleader, you need an experienced lawyer in your corner that handles interpleader lawsuits. Brochu Law has handled interpleader lawsuits in several states and takes cases nationwide. The federal rules allow Brochu Law to litigate a case in federal court with special permission from the court. Hiring an experienced life insurance attorney may even prevent your claim from being depleted or undervalued by the life insurance company and will likely avoid other tricks and tactics.
Brochu Law, PLLC represents Interpleader cases on a contingency fee basis. There is no fee unless you win. We advance all costs on behalf of military families and consumers.
Brochu Law, PLLC represents military families and consumers nationwide*
*Disclaimer –Christopher J. Brochu, Esq. is licensed to practice law in the State of Florida. Brochu Law, PLLC works with co-counsel in accordance with state and federal law.
Common Reasons For Interpleader In Life Insurance Claims When a dispute arises from multiple parties making a claim for the same life insurance...