A Business Partner Receives Life Insurance Proceeds to Buy a Deceased Partner’s Interest but Keeps the Money.

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Insurance Policy for Partner

In a 2014 case out of the Tyler Court of Appeals, the court decided a case involving life insurance proceeds between partners. Two men were partners in a business. They obtained life insurance policies on each others life for $2,000,000.00. When one partner died, the other partner decided to keep the two million dollars. The family of the deceased partner filed suit alleging that the life insurance policy was meant to go to the family of the deceased to buy out his interest in the company. The trial court ruled in favor of the living partner. The family appealed.

Who Owns the Life Insurance Proceeds

After reviewing the facts, the court of appeals agreed with the trial court and ruled against the family of the deceased partner. They noted that while there were discussions about the money being used to buy out the family, there was never any contract to do so. Even though the deceased partner may have had a subjective belief that the proceeds of the insurance policy would be given to his family, his state of mind was insufficient to show a valid contract. Since the living partner was the sole beneficiary under the insurance policy, he kept all the money. 12-12-00150-CV.

What Should Have Been Done

The family of the deceased partner believed that the partners had agreed to pay for the insurance policy to protect the family of a partner who died. Just because they believed that didn’t create a contract where none existed. The partners should have entered into a written contract to protect their families. With this much money involved, the partners could have afforded a competent attorney who could have advised them on the proper way to achieve their goals.

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Robert Ray

Board Certified, Personal Injury Trial Law — Texas Board of Legal Specialization. We handle cases all across Texas. Our principal office is in Lantana, Texas (DFW area).

Robert Ray is a Texas attorney who handles inheritance disputes

Why Us?

Inheritance disputes involve someone who has taken advantage of the elderly. These cases are complicated and most often, but not always, involve outsiders. We represent you knowing that these inheritance disputes are private and painful family matters. We know this is a stressful time for you. We strive to obtain the quickest and best results possible so that you can get this troubling episode behind you.

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