QUESTION
What can I do if my mother is being fraud out of death benefits from her father’s life insurance policy?
Asked on Jun 28th, 2013 on Estate Planning - Massachusetts
More details to this question:
I believe my mother is being fraud out of death benefits from her father’s (my grandfather’s) life insurance policy. The company is Chesapeake Life; the policy is purchased in OK. My grandfather became very ill senile so my mother filed for Power of Attorney. She then filled out and submitted a Change of Beneficiary form with Chesapeake to change the beneficiary to her name. It’s been nearly a year now; Chesapeake first denied they received her change form, and then they claim it’s still in review. It is a different excuse for every called she makes. In April this year (2013), her father passed away. Now she wants to file a death benefits claim, but is afraid to because Chesapeake refuses and/or denies confirming the beneficiary has been change, thus creating more paperwork problems if she tries to collect benefits. Is this a case of fraud? (The policy is current and all premiums were paid until her father’s death.) Thank you for your help.
13 ANSWERS
2 Awards
Contact an attorney and have them review the documents write a letter an if necessary file a lawsuit.
Answered on Jul 03rd, 2013 at 3:14 AM
Admiralty / Maritime Attorney serving Monrovia, CA
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The Law Office of Nathan Wagner
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It is not clear from your description whether your mother actually had the authority to change the insurance beneficiary. A person cannot "file for Power of Attorney". Your grandfather could have voluntarily granted her power of attorney, by signing the correct paperwork while he had the mental capacity to do so. Or your mother could have filed a petition in court to become his guardian, with the power to conduct his financial affairs. So, that may be why the insurance company has questions about the change of beneficiary form.
Answered on Jul 01st, 2013 at 8:27 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Are you asking whether your mother is guilty of fraud or the insurance company? It may well have been inappropriate for your mother to try to change the beneficiary of the policy, while acting under the POA. In her fiduciary capacity, she is required to act only in her father's best interest. It sounds like naming herself as beneficiary of the insurance would be self-dealing. That is probably what is giving the insurance company pause. They do not want to risk being sued by the original beneficiary of the policy.
Answered on Jul 01st, 2013 at 8:23 PM
Usually, the best thing to do in this situation is to immediately file a claim to be paid the death benefits. The insurance company will make a determination if you are entitled to be paid and notify you of its decision.
Answered on Jul 01st, 2013 at 7:23 PM
Unless the Power of Attorney your mother got from her father specifically granted her the power to amend insurance policies, her action to change the named beneficiary on the insurance policy may not have been lawful. One of the classic ways to defraud seniors (and their heirs) is to gain control of their finances and then switch everything over to the fraudster's name. States are really cracking down on elderly fraud and that may be why the insurance company is hesitating about switching the beneficicary name. If the previous beneficiary on the policy predeceased your grandfather and your mother is his sole surviving heir, it's likely that the funds will come to her anyhow. If the beneficiary is still alive, he or she would be entitled to the funds. If the beneficiary is deceased and the funds are transferred to your grandfather's estate, whoever the will names as heir to the remainder of his estate will receive the funds.
Answered on Jul 01st, 2013 at 7:23 PM
This is a question o f Delaware or Oklahoma law and not California. In California, a power o f attorney can not be created if the person is senile because they have not made an intelligent choice to transfer a legal right. I suspect the same is true in both other states too. So your mother may not be entitled to collect directly from the life insurance policy and it would pass to the beneficiary under the policy, which may very well be her, but that requires different paperwork. The tax consequence should be the same not treatable as taxable income. So the insurance company probably is acting correctly but should have told your mother what is going on.
Answered on Jul 01st, 2013 at 7:22 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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Who are the other heirs? If paid to the estate and she is only heir she will get anyway, it will just have to go through probate Did you send change certified mail so she has proof of mailing? Did she follow all requirements for signing, witness, etc. because they can hold change invalid if procedures not followed.
Answered on Jul 01st, 2013 at 7:22 PM
Probate and Trust Administrations Attorney serving Henderson, NV
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Clear Counsel Law Group
Of course, it is difficult to understand all of the facts based only on the short paragraph that you provided. However, based on what you provided, it appears that Chesapeake Life is well within their rights to be reviewing this matter and likely denying any claim made by your mother. First, if your grandfather was senile as you noted, he would not have had the contractual capacity necessary to sign a valid power of attorney form. Second, typically, power of attorney forms do not include the power to make changes to beneficiary designations on life insurance policies, though it is possible that this power could be granted. It would appear questionable, though, based on your description of your grandfather as very ill and senile, that he would have understood what was happening when he signed that power of attorney. From what you have described, and meaning no offense to you or your mother, it appears from the outside that it is your mother that is attempting to accomplish something fraudulently. Frequently, family members take advantage of elderly parents to gain control over them through a power of attorney signed at a time that the elderly parent does not understand what they are signing. Then, the family member uses that wrongfully-obtained power of attorney to take advantage of their parent by cashing out bank accounts, attempting to change beneficiary designations, and all sorts of other bad actions. It is not surprising at all that Chesapeake Life is being very cautious with this matter. If this is not the case with your mother's interactions with her father, she would be very-well advised to speak with an attorney to help her with the claim to the life insurance.
Answered on Jul 01st, 2013 at 7:21 PM
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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You can talk to an attorney who is licensed in Oklahoma. Or you can contact the Oklahoma Division of Insurance and see if they can investigate it for you.
Answered on Jul 01st, 2013 at 4:03 PM
Thomas Edward Gates
It could be a case of fraud. Most power of attorneys do not permit change the beneficiaries on legal documents (like insurance policies). I think this why the company is taking so long to determine who the true beneficiaries are.
Answered on Jul 01st, 2013 at 12:26 PM
You can do nothing. However, your mother should immediately engage the services of an attorney specializing in estate litigation.
Answered on Jul 01st, 2013 at 12:10 PM
3 Awards
Once he was senile, he was probably no longer competent thus he could not legally execute a power of attorney. So the issue may have been created by your mother. I urge her to seek legal counsel.
Answered on Jul 01st, 2013 at 11:58 AM
If the policy was owned by your grandfather then how did your mother have power to change the beneficiary? Who was the beneficiary on the original policy? The issue as I interpret your writing is whether there is a beneficiary already named in your grandfather's policy. Why was mother changing the beneficiary?
Answered on Jul 01st, 2013 at 11:53 AM