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I suspect my stepmom removed me as beneficiary from my late father’s life-insurance policy. What can I do?

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My dad passed away in March 2019. My stepmom told me I had an inheritance from my dad.  She ceased communication with me after my dad passed away. I reached out to the Department of Financial Services website for lost life-insurance policies, and received a letter saying my dad was a participant, but had named someone other than me as a beneficiary.  

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My stepmother has been less than ethical at times. She previously stole money from her sister’s bank account while working for the financial institution that she now runs. Her sister did not press charges, so the matter was dropped by my dad, with whom she was having an affair. Is it possible that she changed the beneficiary, and could have forged anything on behalf of my dad?  

My family also suspects she tried to cash another life-insurance policy for which I was a 51% beneficiary. She sent me a check after my dad passed saying it was a “gift,” and called me nearly two years later saying a policy had just been “found” with me as 51% beneficiary. I suspect she was the 49% beneficiary. To make matters worse, that policy was through her place of business.

Suspicious Daughter

Dear Suspicious,

Anything is possible. It sounds like you are dealing with an unknown quantity, and she should not be trusted with other people’s money. Your stepmother does not, from your account, appear to be on the up-and-up, given that she reportedly stole money from her sister’s bank account. It may be that she could not bring herself to cash a policy with you receiving 49% — hence the delay —  but given the division outlined in the policy it seems unlikely that she could have kept the entire policy for herself. An executor has a responsibility to deal with an estate in a timely manner.

It’s not unheard of for people to question an amendment that was made to a trust, insurance policy or last will and testament. Priscilla Presley, the ex-wife of Elvis Presley, the “King of Rock and Roll” who died in 1977, filed legal documents in Los Angeles Superior Court last week, disputing the validity of an amendment to a living trust overseeing the estate of her late daughter Lisa Marie Presley, who died earlier this month. The 2016 amendment removed Priscilla Presley and a former business manager as trustees, the Associated Press reported.

Among the issues cited in the legal filing: Priscilla Presley was allegedly not notified of the change as required, an absence of a witness or notarization, Priscilla Presley’s name was misspelled in a document that was allegedly signed by her late daughter, and Lisa Marie Presley’s own signature was described as atypical, the news agency also reported. Aside from questions swirling over the authenticity of an amendment, changes to wills, trusts and — in your case — insurance policies must always meet certain legal standards.

It’s not unheard of for people to question an amendment that was made to a trust, insurance policy or last will and testament.

“Last-minute changes in beneficiaries can be a red flag for life-insurance companies,” according to LifeInsuranceAttorney.com. “Usually, the person insured by a life-insurance policy can change their beneficiaries whenever they want, so long as the change complies with any specific requirements in the life-insurance policy. However, when the insured person is elderly, severely ill or lacking mental capacity, and the change in beneficiary happens shortly before the insured person passes away, they may have been unduly influenced by others.”

“For example, a caretaker or estranged family member may convince or influence the vulnerable insured person to add them as a beneficiary on the insured person’s life-insurance policy or to remove other beneficiaries,” the firm says. What’s more, “Life-insurance companies may also deny claims if the beneficiary made a change in the beneficiary that did not comply with the requirements of the insured person’s life-insurance policy. Some policies may require that the insured person have a certain amount of witnesses present,” it adds.

Depending on the amount of money involved, you may wish to hire an attorney to see if you have a case and/or to put your mind at rest. The statute of limitations — that is, the amount of time you have to challenge the validity of a life-insurance policy — may vary, depending on the circumstances, the state where you live and/or whether new information has come to light. “The statute of limitations, in most cases, lasts for three years. But not always,” according to the Center for Life Insurance Disputes, an insurance agency in Washington, D.C.

She stopped talking to you after your father passed away: It could be that she was shoring up what was left of his estate, and figuring out what she could take for herself. Or it may be that you did not get along, and a breakdown of communication was inevitable. Or both. Were there any changes made to your father’s policy that would raise a red flag? That much is unclear. Your stepmother may have learned her lesson when she was not prosecuted by her sister for alleged financial malfeasance.

And, then again, maybe not.

Yocan email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

More from Quentin Fottrell:

My mother excluded me from her will — before she died, my sibling cashed out her annuity policy, on which I was a beneficiary. Should I sue my family?

‘I’m clean and sober’: My late father left me 25% of his estate, and my wealthy brother 75%. My brother died 10 months later. Should I ask his son for his share?

‘It’s still painful’: My wife of just one year left me, took all her belongings and won’t answer her phone. How do I protect my finances?



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