Case Studies

Case Study #1:
Challenging a Designation

The deceased insured was a female in her mid 50s. She was married, with two children from a prior marriage. She had purchased a $200,000 life insurance policy through her employer, part of an ERISA welfare benefit plan. When she obtained the policy, she designated her children as the beneficiaries. 

Several years later, she was diagnosed with breast cancer. It eventually progressed to a terminal stage. She was placed in hospice care and given palliative care, which primarily involved taking morphine for pain.

Just after she was placed into hospice care she allegedly executed a new beneficiary designation, leaving the entire policy to her husband. Her children were away when she made the designation change. Only her husband was present. She died just over two weeks later. Her husband did not tell her children of the beneficiary designation change until after she died.

Her children contacted Texas Life Insurance Attorney Michael Young shortly thereafter to evaluate a contest to the designation change. They were concerned about the timing of the designation, so close to their mother’s death.

The daughter spoke with her the day of the designation. She that her mother was anxious, fatigued, and confused. She sounded scared when she was able to communicate. During portions of the call, her mother appeared to doze off. She blamed her medications for causing fatigue and drowsiness.

The children were also concerned that their mother’s husband - their step father - had not been honest with their mother regarding his background. He told them he was heir to a business fortune and would one day become rich.

With the assistance of the children, attorney Michael Young investigated the circumstances of the designation change, her mental capacity, and the husband’s background. This involved talking with witnesses, reviewing available records, and obtaining statements.

Attorney Young wrote a letter to the insurance company, detailing the mother’s available medical records, the family situation, and the fraud and physical abuse worked by the husband.  In response, the insurance company filed an interpleader lawsuit in Texas federal court. 

The husband hired a lawyer to defend the designation in his favor.  But attorney Young compiled evidence so overwhelming that the husband essentially conceded rather than explain himself to the federal judge.  The court awarded the entirety of the proceeds to the children.

Case Study #2:
Defending a Designation

Decedent  died of leukemia in her late 30s.  She had a $2 million dollar life insurance policy.  Because she purchased the policy directly, not through an employer, it was governed by Texas law, not ERISA.

She originally designated her current husband and her two minor children, from prior relationships, as equal beneficiaries. She then was in the process of divorcing her husband when she changed the designation.  She designated her mother the sole beneficiary of the policy.

She died before the divorce was finalized.  Her husband contested the payout to her mother.  The husband noted that the divorce court had entered standing orders at the outset of the divorce case. Those standing orders included a prohibition on either person changing the beneficiaries on any life insurance policies. 

The insurance company filed an interpleader in federal court. The husband made a claim to the proceeds.  The mother’s family, who had custody of the minor children, hired attorney Young to defend the later designation.

Attorney Young successfully argued that the later designation was still valid, even if technically in violation of the standing divorce court order.  The federal court appointed an ad-litem to represent the interests of the minor children.  Attorney Young provided persuasive evidence to the ad- litem that the best interests of the children would be served by their grandmother receiving the proceeds.   The Court subsequently awarded the proceeds pursuant to the last beneficiary designation.