Case Study: Beneficiary Dispute Between Ex-Spouse and Current Spouse Resolved Successfully
Life Insurance Case Examples & Real Client Success Stories
Beneficiary disputes are some of the most emotional and complex life insurance cases I handle. When two people believe they are the rightful beneficiary — especially an ex-spouse and a current spouse — the conflict can escalate quickly.
In this case, our client, the current spouse, came to me devastated. Not only had she suddenly lost her husband, but she learned that the insurance company had frozen the life insurance benefit because his ex-wife filed a competing claim. Despite years of marriage and contributions to their household, she was told she might not receive anything.
My role was to step in, protect her rights, and ensure the benefits went to the person the insured truly intended.
The Problem
After her husband passed away unexpectedly, our client submitted a routine life insurance claim through his employer-sponsored group policy. Shortly after, she received a letter stating:
Another individual had come forward claiming to be the rightful beneficiary
The insurer was initiating an interpleader review
Payment would be delayed indefinitely
The insurer needed documentation from both parties
The complication arose because:
The policy beneficiary form on file was outdated
The insured had divorced his first wife years earlier
The current spouse believed he updated the beneficiary form, but HR had no record
The ex-wife insisted the outdated form remained binding
The ex-wife’s divorce decree had general language about dividing property and nothing specific about life insurance
This is a classic scenario that turns into an interpleader lawsuit if not handled quickly and strategically.
What We Did
I immediately requested:
The full claim file
All beneficiary designation forms on record
Telephone conversations between the insured and the insurance company
HR communications
Enrollment documents
Any policy amendments
Employer benefit files going back several years
Upon review, several critical issues emerged:
1. HR had failed to process an updated beneficiary form.
The insured had attempted to change the beneficiary after his remarriage, but HR had documented the change incorrectly — a common administrative error in employer-sponsored plans.
2. The insurer relied solely on the outdated form.
They ignored surrounding evidence indicating the insured’s clear intent.
3. The policy fell under ERISA.
That meant federal law applied, not state divorce or family law. Under ERISA:
The plan administrator must pay benefits according to plan documents
BUT administrative errors and flawed record-keeping can legally invalidate a designation
4. Communications showed the insured consistently listed his current wife in all other benefit elections.
This supported his intent and strengthened the claim.
Using this evidence, I prepared a comprehensive legal position showing:
HR’s error was the root cause of the dispute
The insured demonstrated consistent, documented intent to change the beneficiary
The outdated form was not reliable due to administrative mishandling
ERISA case law supported change of the designation
Outcome
After presenting our evidence and legal arguments:
The insurer declined to initiate an interpleader
The ex-spouse withdrew her claim after receiving our legal position
The insurer paid the full benefit to our client
No litigation was required
The dispute was resolved within weeks, not months
This was a tremendous relief to our client, who had been terrified she might lose the benefits her husband intended for her.
Why This Case Matters
Beneficiary disputes often feel hopeless to families — especially when an ex-spouse is involved or when HR mistakes complicate the paperwork.
This case highlights two important truths:
1. Outdated forms do NOT always control the outcome.
Administrative errors, incomplete records, and proof of intent can dramatically change the legal analysis.
2. ERISA beneficiary disputes require federal-law strategy.
Many beneficiaries assume divorce decrees or state laws apply. Under ERISA, they typically do not.
Every year, I see cases where rightful beneficiaries are pressured, misinformed, or discouraged from pursuing their claims. With the right legal approach, these disputes can often be resolved quickly and successfully — without court.
If You’re Facing a Beneficiary Dispute, I Can Help
If you’re dealing with:
An ex-spouse claiming benefits
A disputed beneficiary designation
Missing or outdated insurance forms
An HR or employer mistake
An insurer threatening an interpleader
You don’t have to navigate it alone.
FAQs About Beneficiary Disputes
Q: What happens if both an ex-spouse and a current spouse claim the same life insurance benefit?
When two people claim the same life insurance benefit, the insurance company may freeze the payout until they determine who is legally entitled to the money. In many cases, the insurer threatens an interpleader lawsuit, which means they will deposit the benefit with a court and let the judge decide.
However, many beneficiary disputes can be resolved without litigation when the claim file, HR records, or updated beneficiary forms clearly show who the insured intended to receive the benefit.
Q: Does a divorce automatically remove an ex-spouse as the life insurance beneficiary?
Not always. If a policy is controlled by state law and the state has enacted an automatic revocation statute on life insurance policies, the ex-spouse will be automatically removed. However, for employer-sponsored life insurance policies governed by ERISA, a divorce does not automatically remove an ex-spouse. The plan administrator must generally follow the beneficiary form on file, even if it lists the ex-spouse.
However, administrative mistakes or evidence of the insured’s clear, consistent intent to update the beneficiary can change the legal analysis. This is why reviewing HR files and enrollment forms is so important.
Q: Can HR or employer errors affect who receives life insurance benefits?
Yes — more often than most families realize. HR departments frequently make mistakes with:
Enrollment forms
Beneficiary changes
Evidence of insurability
Uploading or processing updated documents
Recording the wrong beneficiary in the system
Under ERISA, these administrative errors can be grounds to correct or “reform” the beneficiary designation so the money goes to the rightful person.
Q: Do I need a lawyer for a beneficiary dispute?
While you are not required to have one, beneficiary disputes are often too complex to navigate alone. These cases involve:
ERISA regulations
Policy language
HR compliance
Competing claims
Threats of interpleader
Evidence of the insured’s intent
A life insurance attorney can review your documents, identify legal errors, communicate with the insurer, and help prevent your case from being dragged into court.
Q: What should I do if an ex-spouse is claiming the life insurance benefit?
Act quickly. Competing claims often trigger strict deadlines and can get complicated fast. You should:
Request the full claim file
Gather all HR and enrollment documents
Save any written records showing the insured’s intent
Avoid giving statements to the insurer without legal guidance
Contact a life insurance attorney to protect your rights
With the right legal approach, many of these disputes can be resolved long before they reach court.
📞 Contact Kadetskaya Law Firm LLC for a Free Consultation
1-888-510-2212
info@life-insurance-lawyer.com
I’m here to review your situation, explain your rights, and fight for the benefits your loved one intended for you.
📘 Before You Go: Don’t Face a Denial Without a Plan
A denied life insurance claim can feel overwhelming — especially when you're grieving. That’s why I created the Ultimate Checklist, a free downloadable guide that walks you step-by-step through:
✔ what to read
✔ what to request
✔ what deadlines matter
✔ what mistakes to avoid
✔ and when to call a lawyer
This guide was made to help you protect your rights before the insurance company locks you into an unfair outcome.
👉 Download your FREE Ultimate Checklist now
(You can print it, save it, or bring it to your free consultation.)
