Working With an Interpleader Attorney

An interpleader starts when a company holding money, usually a life insurer, says it cannot safely pay because more than one person has claimed it. The company deposits the money with a court, asks to be released, and leaves the claimants to prove who is entitled to it. (The basics guide explains the procedure.) This page is about the claimant’s side: what an attorney does for you in that contest, and when to bring one in.

What an interpleader attorney does for a claimant

Protects your place in the case. In federal court a defendant usually has 21 days after being served to respond, or 60 days after the request was sent if formal service was waived.¹ A claimant who does not respond can be defaulted under Rule 55, and a default can end a claim to the fund.² An attorney files an answer that sets out your claim, and, where it fits, a crossclaim against the other claimants.³

Tests what the stakeholder is asking for. The insurer will usually ask to deposit the funds, be dismissed, and recover its attorney’s fees from the fund. Your attorney checks whether the full amount was deposited (including any interest the policy or state law requires), whether the fee request is reasonable, and whether the insurer did anything that should keep it in the case. See discharge, fees, and interest and attorney’s fees in interpleader.

Identifies which law controls. Many disputes turn on this question. For employer plans governed by ERISA, the Supreme Court has held that the administrator pays according to the plan documents, and that state revocation-on-divorce statutes are preempted.⁴ Federal employee (FEGLI) and servicemember (SGLI) coverage have their own federal order-of-precedence rules.⁵ For individual policies, state statutes, including revocation-on-divorce laws, often decide the outcome. See federal programs and state law differences.

Builds the factual record. Claims usually rest on documents the claimant does not have: the insurer’s file, the beneficiary change forms and how they were submitted, call recordings, plan documents, a divorce decree, or medical records bearing on capacity. An attorney obtains them through discovery, subpoenas, and depositions, and uses them to support or defeat a disputed designation. See why beneficiary disputes happen.

Negotiates or tries the dispute. Most cases are resolved by settlement or by a motion for summary judgment. When a minor is a claimant, court approval of a settlement is often required. See minor beneficiaries.

Gets the money released. Funds deposited with a federal court can be withdrawn only by court order.⁶ The case is not finished for you until that order is entered and the payment goes out.

When to call

• The insurer says it has received a competing claim or is holding payment. What you send or sign at this stage can shape the case that follows. See before an interpleader is filed.
• Your claim has been delayed without explanation, or the insurer says it is in “legal review.”
• You are asked to sign something: a release, a disclaimer, a settlement, or a split of the benefits. Releases and settlements are usually final.
• Another claimant or that person’s lawyer contacts you.
• You have been served with a summons and complaint. Note the date you were served; the response deadline runs from it. See named in an interpleader.
• The insurer asks the court to pay its fees out of the fund, or to be released from the case.
• The dispute involves a divorce, a recent beneficiary change, a death in which another claimant is a suspect, or an employer or federal plan. These are the issues on which cases most often turn.

Interpleader cases are often in federal court. What matters most is an attorney who has interpleader experience and knows the federal rules that govern these cases.

What to have ready

Gather what you can. Missing items are normal; an attorney can usually obtain the rest.

• The summons and complaint, if you have been served, and the date and manner of service.
• The policy, certificate of coverage, or plan documents, and the insurer’s claim number.
• Every beneficiary designation or change form you have, and any letter confirming a change.
• Letters and emails from the insurer or its lawyers, especially any letter describing a competing claim or setting a deadline.
• The death certificate.
• Any divorce decree, property settlement, will, trust, or court order that mentions the policy or account.
• The names and contact details of the other people who may claim the money.
• A short timeline: when the policy was bought, when designations changed, when the insured died, and when each claim was made.

How Interpleader Law handles these cases

Interpleader Law publishes this site. The firm focuses on life insurance disputes and represents beneficiaries and other claimants nationwide, in all 50 states. Its work includes interpleader lawsuits and beneficiary disputes, as well as claims under employer plans governed by ERISA and under the federal FEGLI and SGLI programs. Michael J. Hoover is the firm’s managing partner and the attorney responsible for this site.

The firm reviews interpleader cases at no cost to you. The first step is to send the firm the basic facts or call; the firm will let you know whether it can help.

Footnotes

1. Fed. R. Civ. P. 12(a)(1)(A). Cornell LII. ↩

2. Fed. R. Civ. P. 55. Cornell LII. ↩

3. Fed. R. Civ. P. 13(g). Cornell LII. ↩

4. Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 555 U.S. 285 (2009); Egelhoff v. Egelhoff, 532 U.S. 141 (2001). See the decisions page. ↩

5. Hillman v. Maretta, 569 U.S. 483 (2013) (FEGLI); Ridgway v. Ridgway, 454 U.S. 46 (1981) (SGLI). See the decisions page. ↩

6. 28 U.S.C. § 2042. Cornell LII. ↩