The idea of life insurance in estate planning is to give the heirs some ready cash while the estate is being settled. However, it doesn’t always work out that way, according to BNA - Pension & Benefits Daily in "MetLife Stuck Between Wife and Girlfriend in Benefit Battle."
In the case described in the article, a policy holder passed away and the insurance company filed a case in court requesting that the court determine to whom it should pay.
The deceased had originally named his wife as the beneficiary. However, he later switched beneficiaries and named his girlfriend.
The company was not sure what to do, since there was evidence that the deceased had been impaired by a stroke when he changed beneficiaries.
MetLife requested to be allowed to exit the lawsuit it filed, since it had deposited the policy funds with the court and had no stake in whether the proceeds were awarded to the wife or the girlfriend.
The court refused to allow MetLife out of the case, because they did not follow their own policies.
The company policy is to only allow beneficiaries to be designated in writing.
However, when naming both the wife and later the girlfriend as beneficiaries, MetLife had allowed the deceased to do so by phone.
This case will get settled. However, it is unlikely that MetLife has heard the end of it.
It is a very wise idea to consult with an estate planning attorney about your life insurance, feel free to reach out to us today for a free consultation.
Reference: BNA - Pension and Benefits Daily (Sep. 11, 2017) "MetLife Stuck Between Wife and Girlfriend in Benefit Battle."