One small oversight in your estate plan—such as failing to update your life insurance beneficiary—can unravel everything you’ve worked for. At John R. Tatone & Associates, we help Michigan families catch these errors before they lead to court battles and financial loss.
This article explores real-world mistakes we’ve seen, including disputed signatures, deceased beneficiaries, and forgotten updates after divorce. Most importantly, you’ll learn how to avoid these pitfalls and protect your loved ones.
A Real Case: When a Signature Is Disputed
One of our clients was listed as the primary beneficiary of a friend’s $450,000 life insurance policy. Six months before passing, the insured submitted an official change of beneficiary form, signed and witnessed correctly. Yet after the death, the estate’s personal representative disputed the signature’s authenticity, claiming it was forged and that the funds should go to the estate—of which he was the sole heir.
A disinterested witness and a forensic handwriting expert supported our client’s claim, verifying the signature was legitimate. Still, the estate challenged it, attempting to divert the proceeds into probate court—despite clear evidence of the insured’s intentions.
Lesson: Even a properly signed document can lead to costly litigation if your estate plan lacks backup structures, such as a trust, or the proper legal coordination.
When a Beneficiary Dies First
A major estate planning mistake is failing to update your life insurance when life changes.
What if your named beneficiary dies before you—and you never update the form or list a contingent beneficiary? Most people assume the benefit would go to the deceased’s children. That’s often not the case.
✅ Michigan Law Says:
Under the Michigan Supreme Court case Metropolitan Life Ins Co v Thompson, 368 Mich 1 (1962), the life insurance payout goes to the insured’s estate if no valid beneficiary is alive:
“Where the named beneficiary predeceased the insured and no contingent beneficiary was designated, the proceeds are payable to the estate of the insured.”
This means your loved ones may endure probate and legal fees, instead of receiving the benefit directly.
✅ Federal Law: FEGLI Example
Under 5 U.S.C. § 8705(a), if no valid beneficiary is designated, life insurance under the Federal Employees’ Group Life Insurance (FEGLI) follows this order:
Spouse
Children
Parents
Estate
Next of kin
But again—if you don’t name a backup, your estate plan may not reflect your wishes.
Divorce and Life Insurance: A Risk You Didn’t Expect
Did you get divorced but forget to change your life insurance beneficiary? You’re not alone—and that could mean your ex-spouse receives the payout.
Under MCL 552.101(2), Michigan law says a divorce judgment revokes a spouse’s right to life insurance proceeds—unless:
The divorce decree specifically keeps them as the beneficiary, or
You reaffirm them as the beneficiary after the divorce
Failing to update these forms can cause your family to fight a losing battle while your ex benefits. Worse, if your children are minors, your ex may control their inheritance if no estate plan provides otherwise.
5 Ways to Avoid a Life Insurance Disaster in Your Estate Plan
Alt text: Estate plan checklist for managing life insurance beneficiaries
Review Beneficiaries Annually
After marriage, divorce, births, or deaths.Name Contingent Beneficiaries
Protects against the death of your primary designee.Use Official Company Forms
Handwritten notes or letters won’t hold up.Keep Copies & Use Witnesses
Secure signed copies and have a neutral witness present.Work with an Estate Planning Attorney
An attorney can align your insurance with your estate plan, help protect minor children, and even serve as a formal witness to reduce the chance of disputes.
The Bottom Line: A Smart Estate Plan Prevents Life Insurance Nightmares
Your estate plan should ensure your wishes are honored—not leave your family in court fighting with greedy heirs or ex-spouses. Failing to update a beneficiary or relying on assumptions can cost your family thousands in legal fees and unnecessary heartbreak.
At John R. Tatone & Associates, we’ve seen the damage poor planning can cause—and we know how to prevent it.
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