Iowa: Beneficiary Disputes and Interpleader Under Iowa Law

The statute and its timetable

Iowa Code § 633.535(3) provides that a named beneficiary of a life insurance policy “who intentionally and unjustifiably causes or procures the death” of the insured “is not entitled to any benefit under the … policy,” and that “the benefits become payable as though the person causing death had predeceased the decedent.”¹

Section 633.536 sets the procedure:²

• Civil standard. The determination “may be made by any court of competent jurisdiction by a preponderance of the evidence separate and apart from any criminal proceeding arising from the death.”
• Built-in wait. The civil case “shall not proceed to trial, and the person causing death is not required to submit to discovery,” until the criminal proceeding “has been finally determined by the trial court,” or, if no charge is brought, “until six months after the date of death.”
• Conclusive presumption. “A person convicted of murder or voluntary manslaughter of the decedent is conclusively presumed to have intentionally and unjustifiably caused the death.”

The conviction rule is narrow. In Banner Life v. Vernard, one of the insured’s children, a named beneficiary of a share of the policy, was charged with first-degree murder and later pleaded guilty to lesser offenses. The court explained that he “was not convicted of either murder or voluntary manslaughter, as he pleaded guilty to lesser included offenses,” so “he was not conclusively presumed to be excluded from receiving policy proceeds.”³ A civil court would have to decide the question itself.

When the accused beneficiary dies first

The accused beneficiary died in prison before the interpleader was decided. His siblings, without lawyers, asked for summary judgment on the theory that his death made the slayer question moot. The court disagreed: “Unfortunately, rather than simplifying this case, [his] death complicates matters further.”³

• The policy did not alter the general rule that a beneficiary’s right vests on surviving the insured. If he had any right, “[his] subsequent death did not cause that right – if it existed – to evaporate”; it passed under his will or to his heirs.
• So “the dispositive issue remains whether [he] was precluded from receiving proceeds from the Policy under Iowa’s slayer statute.”
• The record held only the insurer’s allegations, not evidence. The court denied summary judgment without prejudice, vacated the trial date, and directed the siblings to identify his heirs and serve them under Rules 4 and 25.³

Fees in a small, difficult fund

The insurer had already paid the other beneficiaries their shares and interpleaded only the disputed share, $43,317.16. The court noted authority for a “normal course of business” exception to fee awards but followed the Eighth Circuit’s statement that a “stakeholder should not ordinarily be out of pocket for the necessary expenses and attorney’s fees incurred by him.” It accepted that “this case presents complex circumstances necessitating more work than a usual interpleader action,” because the claimants had no lawyers and two were incarcerated, and it awarded $10,408 in fees and costs.⁴ That was nearly a quarter of the deposit. See attorney’s fees in interpleader.

Decisions

Elsewhere on this site

• Sands v. Midland National, an undue influence dispute over online beneficiary changes that began in the Southern District of Iowa, is summarized in the decisions library.

Related guides

• State law differences
• Slayer rule
• Attorney’s fees in interpleader
• Divorce and beneficiary designations
• Federal programs

Footnotes

1. Iowa Code § 633.535(3). Iowa Legislature (PDF). ↩

2. Iowa Code § 633.536. Iowa Legislature (PDF). ↩

3. Banner Life Ins. Co. v. Vernard, No. C24-3008-LTS-KEM, Doc. 33, at 2–8 (N.D. Iowa May 22, 2025). GovInfo. ↩ ↩² ↩³

4. Banner Life Ins. Co. v. Vernard, No. C24-3008-LTS-KEM, Doc. 26, at 9–12 (N.D. Iowa June 28, 2024). GovInfo. ↩