Can I Stop Payment to the Wrong Beneficiary Due to Fraud?

Once you loved one’s beneficiary designations for their life insurance policy, retirement account, and payable-on-death accounts, get revealed, they may be particularly unexpected for you. Not only surprising, but you may find them alarmingly fraudulent. This may especially be your stance if your loved one made changes to these assignments closely before their passing, if they were mentally incapacitated towards the end of their lifetime, if they had an odd relationship dynamic with the new beneficiary, etc. No matter the exact reason for your suspicion, you must follow it and take action to halt the transfer of these funds. Continue reading to learn how to stop a financial institution from paying the wrong beneficiary when you have an ongoing fraud-related claim and how an experienced Putnam County estate litigation attorney at the Law Office of Andres D. Gil, PLLC, can fight to ensure these assets stay in the right hands.

Can I stop a financial institution from paying the wrong beneficiary due to fraud?

Arguably, it is easier to stop a financial payout to the wrong beneficiary than to track down this money later from this possibly fraudulent individual. This is because, once it gets into their possession, there is no telling how quickly they may spend it or how skillfully they may hide it.

For this, you should let your attorney send a written notice to the financial institution (i.e., insurance company, brokerage firm, retirement plan administrator, bank, etc.) on your behalf. Here, they may explain how there is an ongoing legal dispute over the beneficiary designation and that they should not release the payment while the case is still pending.

Your attorney may supplement this written notice with tangible evidence. Even so, the institution may still express its plans to pay out, or inform you that it has already issued the payment. Given either of these scenarios, your attorney may then have to file for emergency court relief or sue the beneficiary to recover the funds, respectively.

What is an interpleader action when there are claims of fraudulent beneficiary designations?

After receiving a written notice from your attorney, a financial institution may become deeply aware that it could be held liable for paying the wrong beneficiary. This is especially relevant if allegations of fraud are being thrown around. Here, they may initiate their own internal review process if such a protocol is already established. Or, they may execute an interpleader action.

With an interpleader action, a financial institution essentially notifies the court that two or more individuals claim the funds from this account, they do not want to guess who the right individual is, and they want the judge to decide. In other words, the institution deposits the funds with the court, or holds it under court direction, while competing claimaints litigate.

To conclude, please prioritize scheduling an initial consultation with a skilled estate planning attorney in Putnam County, from the Law Office of Andres D. Gil, PLLC. We would be honored to represent you in your legal case.