Undue Influence and Capacity in Beneficiary Disputes

Two different claims

Undue influence says the insured could make decisions, but someone else’s pressure replaced the insured’s own wishes. The Fourth Circuit, applying Maryland law, described the question as whether the influencer’s actions destroyed the insured’s “free agency.”¹

Lack of capacity says the insured could not understand what he or she was doing when signing the change. Standards vary by state and by the kind of document, and evidence usually includes medical records, medications, and testimony from people who saw the insured around the time of signing.

The two claims are often raised together, and the same facts, such as serious illness and medication, may bear on both.

Who has to prove what

The person challenging the change generally carries the burden of proof. Some states make that easier with a presumption:

• In Carpenter, the Florida Supreme Court held that a presumption of undue influence arises when a substantial beneficiary who had a confidential relationship with the decedent was active in procuring the will. It listed factors bearing on active procurement: the beneficiary’s presence at the signing or when the person expressed a wish to make a will, recommending the lawyer, knowing the contents in advance, giving the lawyer instructions, securing the witnesses, and keeping the document afterward. The court said the list is not exclusive and not every factor must be present.²
• Carpenter treated the presumption as shifting only the burden of coming forward with a reasonable explanation. Florida later provided by statute that, in transactions to which the presumption applies, it is “a presumption shifting the burden of proof.”³

Other states use different tests. Applying Arizona law, a federal court said that a person is presumed to have the mental capacity to exercise contractual rights, including the right to change a beneficiary, and that the insured’s intent governs competing claims to insurance proceeds.⁴ The Arizona Supreme Court has held that where the insurer does not insist on its change procedure, “the clearly manifested intent of the insured should control.”⁵ In California, federal courts use a two-step approach: the claimant who says she is the designated beneficiary must first prove it, and the burden then shifts to the person challenging the designation to prove undue influence, incapacity or fraud.⁶ In federal cases involving ERISA plans, the Sixth Circuit has applied federal common law, which may draw guidance from state law.⁷

North Dakota uses a four-element test for undue influence, and a federal court there sent a dispute over a change made the day before death to a jury.

Factors courts look at

Across the decisions on this page, courts have considered:

• the insured’s physical and mental condition, including medication and dependence on others;
• whether the person who benefited controlled access to the insured, the insured’s finances, or communication with family;
• whether that person obtained the forms, filled them in, arranged witnesses, or delivered them;
• how close in time the change came to death, and whether it departed from the insured’s earlier or stated plans.

None of these is decisive alone. A caregiver who helped with paperwork, for example, is not for that reason guilty of undue influence.

How these disputes usually begin

Capacity and undue influence allegations are among the most common reasons a payment is held, and they often accompany a change made shortly before death. Illustrative examples, written for this guide:

• “She was in the hospital and heavily medicated when the change was made.”
• “He had dementia and could not have understood what he was signing.”
• “The new beneficiary isolated him and took advantage of his decline.”
• “She was pressured into it by the person she lived with.”

An allegation like these can stop payment, but proving it usually requires medical records, testimony from people who saw the insured at the time, and evidence of how the change was made.

Changes made by an agent rather than the insured

When the change was signed by someone acting under a power of attorney, the first question is often not influence or capacity but authority. In a Vermont case, an agent’s change naming himself was not a “gift” under the state’s power of attorney statute, but it fell within the statute’s rules on self-dealing, and factual disputes kept him from winning summary judgment. The question is often: did the document let the agent name himself or herself? In Transamerica Advisors v. Marsch, a Louisiana federal court held that it did not, because the power of attorney barred the agent from designating the principal’s assets to herself “unless specifically authorized,” and Louisiana Civil Code article 2998 bars a mandatary from contracting with himself without the principal’s authorization.⁸ See change of beneficiary.

Statutes protecting vulnerable adults

Some states give family members a statutory route besides common-law undue influence. Arizona’s adult protective statute imposes duties on a person “in a position of trust and confidence to a vulnerable adult,” and a court may “[r]evoke, in whole or in part, any revocable … [d]isposition or appointment of property that is made in a governing instrument by the vulnerable adult to the person who violates” that duty. “Governing instrument” includes “an insurance or annuity policy,” and the remedy reaches a beneficiary designation.⁹ The statute has an exception for a spouse, but only for a transaction that “furthers the interest of the marital community.”

In Prudential v. Vagotis (D. Ariz. 2017), the insured’s mother challenged a change, made days before the death, that named the insured’s spouse, alleging undue influence and financial exploitation of a vulnerable adult under that statute. The case was removed to federal court; the insurer deposited the benefit and was discharged, and the claimants resolved the dispute by consent judgment about 110 days after filing, without any ruling on the allegations. From the $251,340.69 in the registry, the judgment paid $40,000 to the insured’s mother and $211,340.69, plus accrued interest, to the spouse named in the change.¹⁰

In Aetna v. Vacknitz (S.D. Tex. 2019), the widow challenged an online change made the night before the insured died, alleging that he lacked capacity. The coverage was under an ERISA plan, so the plan documents controlled who the beneficiary was, subject to any valid challenge to the change itself. The insurer interpleaded and was discharged, and the claimants settled about seven months after the complaint. From the $407,407.13 deposited, the final judgment paid $25,000 to the widow and $382,407.13, plus all accrued interest, to the former wife named in the change.¹¹

When the challenger has no evidence

Three federal decisions, under Arizona, Texas and California law, make the same point: a challenger who opposes summary judgment needs specific evidence, not belief or suspicion.

• In Thrivent v. Bressler, a daughter argued that medication and medical treatment had affected her mother’s judgment when she named another daughter as sole primary beneficiary, and that a friend or the insurance agent had unduly influenced her. She conceded that her mother had not been found incompetent, offered no details or evidence of confusion, and stated only that she had “a belief that there was undue influence.” The court granted summary judgment for the named beneficiary.⁴
• In Harris v. Wiggins, the insured named his fiancée as primary beneficiary in place of his son about ten weeks before he died, and married her three days after entering hospice. The son pointed to the wedding, her move to Texas after his father fell ill, and phone calls in which his father seemed forgetful, but he had not been present at the signing and offered no medical records or witness affidavits. Applying Texas law, the court held that “[e]vidence that creates only a suspicion of mental incapacity is not sufficient,” that “potential opportunity and his personal opinion” did not show undue influence, and granted summary judgment for the named beneficiary.¹²
• In Sands v. Midland National, the insured had been in and out of the hospital when designations naming his fiancée were submitted. The court found disputes of fact about his vulnerability and her influence, but no evidence of anything she actually did to bring about the changes, and the challenger had produced no documents in discovery. The court granted summary judgment for the named beneficiary, and the Ninth Circuit affirmed over one judge’s dissent.⁶

A challenger who never answers fares worse. In a 2026 Alabama federal case over a brokerage TOD account, a beneficiary dropped by a change made six weeks before the owner’s death told the firm the new form was the product of “forgery, undue influence, coercion, and manipulation,” but did not answer the interpleader. The court refused to lift her default because she offered no facts behind her claimed defenses, held that she had forfeited any claim, and declared the later form “the operative designation of beneficiaries.” The allegations were never tested on evidence.¹³ See Raymond James v. Medina.

Illness, a late change and a family member’s doubts can justify asking questions. They are not, by themselves, proof. Medical records, testimony from people who saw the insured at the time, and evidence of who prepared and submitted the forms usually decide these disputes.

How courts have ruled

American General v. DeLong: a challenge that settled

Not every challenge reaches a ruling on undue influence. In a Georgia federal case, the insured’s mother had been named primary beneficiary of his life policy in 2011. In March and April 2015, the insurer received requests naming another person as primary beneficiary, then as policy owner, and then as irrevocable primary beneficiary, and it confirmed each change by letter to the insured. After the insured died in November 2020, the new beneficiary claimed the benefit, and the insured’s mother disputed it, contending that the changes “were the result of fraud, undue influence, misrepresentations, duress or lack of capacity.” The insurer interpleaded, and in May 2021 the court granted its unopposed motion to deposit the benefit and be discharged with prejudice, with an agreed fee.¹⁴

The insured’s mother asked to move the case to the federal division where the insured had lived, saying many witnesses were there. That motion was pending for months, and in February 2022 the court denied it. It framed the case this way: “The main issue in this case is whether Decedent’s changes to the beneficiary of the Policy were valid” (p. 9). On the usual deference to a plaintiff’s choice of forum, it noted that the plaintiff was the insurer, which had no stake in the outcome: “In light of American General’s dismissal and its indifference to transfer, the Court finds that deference is not appropriate” (p. 11). Because it could compel witnesses to attend trial, it found the remaining factors neutral.¹⁵

The claimants then settled. On their joint motion, in July 2022, about 17 months after the case was filed, the court entered a final judgment dividing the fund, with the larger share going to the named beneficiary, and dismissed the case with prejudice.¹⁶ No court applied an undue-influence or capacity test in this case. The allegations were never tested, and the settlement says nothing about whether they had merit. For the timeline, see how long an interpleader takes.

ReliaStar v. Wiemer: a capacity challenge that settled

As the dispute was framed by the parties, a Texas federal interpleader over a $3,000,000 life insurance policy involved a challenge to the insured’s capacity to make a last-minute change of beneficiary. The court’s orders do not describe the competing claims; they record that the insurer was discharged, that a guardian ad litem reviewed a mediated family settlement for the minor children of one claimant, and that the court paid out the fund by agreement while declining to approve or enforce the parts of the settlement that reached beyond it.¹⁷ No court ruled on capacity. See settling an interpleader for what the court would and would not sign.

Lincoln National v. Steward: a challenge resolved by stipulation

In a Georgia federal interpleader over group life insurance, the insured’s husband and her mother were both named beneficiaries when she died, with the larger share going to the husband. As the court’s order recounts, the mother wrote to the insurer that she had been the beneficiary for years, that the change had been made while her daughter was very ill, under pressure and heavily sedated, and that she was not withdrawing her claim to the whole benefit. The insurer interpleaded. The mother’s claims were later resolved by a joint stipulation and dismissed with prejudice, and the court went on to dismiss the husband’s counterclaims against the insurer, discharge the insurer and deny its fee request.¹⁸ No court ruled on capacity or undue influence. For the fee ruling, see attorney’s fees in interpleader.

Practical points

• Evidence fades quickly. Medical records, hospital visitor logs, the forms themselves, and the identities of witnesses are often central.
• Witness accounts of what the insured said may raise hearsay issues. See handling an interpleader without a lawyer.
• If the change form itself is disputed, see also change of beneficiary.

Footnotes

1. Leimbach v. Allen, 976 F.2d 912, 919 (4th Cir. 1992). ↩

2. In re Estate of Carpenter, 253 So. 2d 697 (Fla. 1971). ↩

3. Fla. Stat. § 733.107(2). Florida Senate. ↩

4. Order Granting Motion for Partial Summary Judgment, Thrivent Financial for Lutherans v. Bressler, No. CV-16-08135-PCT-BSB (D. Ariz. filed Mar. 16, 2017), ECF No. 67, court order (PDF); Judgment (Mar. 16, 2017), ECF No. 68. ↩ ↩²

5. Doss v. Kalas, 94 Ariz. 247, 383 P.2d 169 (1963) (quoting an earlier decision). ↩

6. Sands v. Midland National Life Ins. Co., No. 4:23-cv-04680-DMR (N.D. Cal. Oct. 28, 2024), ECF No. 85, court order (PDF), aff’d sub nom. Sands v. Norman, No. 24-7237 (9th Cir. Dec. 15, 2025) (unpublished), court copy (PDF), reh’g denied (Jan. 29, 2026). ↩ ↩²

7. Tinsley v. General Motors Corp., 227 F.3d 700 (6th Cir. 2000). ↩

8. Transamerica Advisors Life Ins. Co. v. Marsch, No. 3:16-cv-00247-RLB (M.D. La.), consent ruling on motion for partial summary judgment, ECF No. 28 (signed Mar. 22, 2017, filed Mar. 23, 2017), at 5–8, court order (PDF); consent judgment, ECF No. 30 (May 24, 2017), court judgment (PDF); consent order disbursing registry funds, ECF No. 31 (June 13, 2017). ↩

9. A.R.S. § 46-456(A), (C)(2)(a), (J)(4)–(5). Arizona State Legislature. ↩

10. Prudential Ins. Co. of America v. Vagotis, No. 2:17-cv-02761 (D. Ariz.): order for interpleader relief and discharge, ECF No. 24 (Oct. 12, 2017); consent judgment, ECF No. 35 (entered Nov. 13, 2017), court judgment (PDF); order dismissing case, ECF No. 36 (Mar. 29, 2018). The description of the claims comes from the case file, not from a ruling; no court decided undue influence. ↩

11. Aetna Life Ins. Co. v. Vacknitz, No. 4:19-cv-01590 (S.D. Tex.): order granting interpleader and discharge, ECF No. 13 (Oct. 10, 2019); order of dismissal on announcement of settlement, ECF No. 17 (Oct. 29, 2019); final judgment, ECF No. 19 (Nov. 20, 2019), court judgment (PDF). The description of the claims comes from the case file, not from a ruling; no court decided capacity. ↩

12. Memorandum and Order, Harris v. Wiggins, No. 1:18-cv-00523-MAC (E.D. Tex. May 3, 2020), ECF No. 25, at 16–17, court order (PDF); Final Judgment (May 6, 2020), ECF No. 27. ↩

13. Raymond James & Associates, Inc. v. Medina, No. 5:25-cv-1904-CLS (N.D. Ala. May 13, 2026) (memorandum opinion, ECF No. 55), at 13–15, 18–20, opinion (PDF); Amended Complaint ¶ 17, ECF No. 4 (allegation). ↩

14. Order granting unopposed motion for discharge, American General Life Ins. Co. v. DeLong, No. 1:21-cv-00790-JPB (N.D. Ga. May 26, 2021), ECF No. 19.. ↩

15. Order denying motion to transfer, DeLong, ECF No. 21 (N.D. Ga. Feb. 7, 2022), at 2–3, 9, 11–12 & n.3.. ↩

16. Final judgment and order of interpleader disbursement, DeLong, ECF No. 34 (N.D. Ga. July 19, 2022). Court judgment (PDF). The judgment recites that the insurer deposited the benefit with interest on June 9, 2021. ↩

17. ReliaStar Life Ins. Co. v. Wiemer, No. 4:17-cv-00771 (E.D. Tex.), order accepting the guardian ad litem’s report, ECF No. 44 (Aug. 24, 2018); memorandum opinion and order, ECF No. 61 (Nov. 16, 2018), at 2–6 & n.1, court order (PDF); order, ECF No. 67 (Apr. 3, 2019), at 2, court order (PDF). ↩

18. Lincoln National Life Ins. Co. v. Steward, No. 1:16-cv-03108-MHC (N.D. Ga.), order discharging the insurer, dismissing counterclaims and denying attorney’s fees, ECF No. 30 (May 31, 2017), at 2–4, 17–18, court order (PDF); order of disbursement, ECF No. 32 (June 2, 2017). ↩