Did you know that you can set aside a beneficiary designation in New York?
Beneficiary designations on financial accounts and insurance policies can override the terms of a Last Will & Testament, making them powerful estate planning tools—but also potential flashpoints for litigation.
If a beneficiary designation appears suspicious or inconsistent with the Decedent’s intentions, there may be a legal avenue to challenge it—even when the asset passes outside of probate.
Here’s how a proceeding can be initiated in Surrogate’s Court, and why you should proceed with caution.
Step 1: Obtain the Appropriate Fiduciary Authority To Set Aside a Beneficiary Designation
To initiate a challenge to a beneficiary designation or to set aside a beneficiary designation in Surrogate’s Court, the petitioner must first obtain the appropriate fiduciary authority. This can take the form of:
- Letters of Administration (when the decedent died intestate),
- Letters Testamentary (when the decedent left a will and an executor has been appointed), or
- Limited Letters of Administration (when a fiduciary is needed solely to investigate or pursue a specific asset on behalf of the estate).
Which type of letters you need will depend on whether an estate proceeding is already underway and what authority has been granted.
Limited letters are often sought when the sole purpose is to investigate or challenge a non-probate asset, without seeking full appointment as administrator or executor.
At times, the person who is the named executor or administrator is the person who is also the recipient of the beneficiary designated asset. Obviously a fiduciary will not conduct an investigation against themselves and in that event, limited letters are necessary.
Once letters are issued, the fiduciary gains standing to commence legal proceedings—including a petition under SCPA § 2104—to recover estate assets or challenge improper beneficiary designations.
Step 2: File a Proceeding Under SCPA § 2104 to Set Aside a Beneficiary Designation
With limited letters in hand, the fiduciary can initiate a discovery and turnover proceeding under SCPA § 2104, to set aside a beneficiary designation. This proceeding allows a fiduciary to compel a person to return property that rightfully belongs to the estate.
In this context, the fiduciary may allege that the beneficiary designation was invalid due to:
- Undue influence
- Fraud or duress
- Lack of capacity
- Clerical error or mistake
If successful, the court can declare that the asset belongs to the estate and should be distributed under the terms of the will (or intestacy law, if no will exists).
Beware of Multiple Beneficiary Disputes In your Efforts to Set Aside a Beneficiary Designation
Before initiating a proceeding, it’s critical to assess whether the dispute is truly about the decedent’s estate—or whether it’s a dispute between living persons over who is entitled to an asset.
This is especially relevant when there are multiple beneficiary designations over the years, with different people named at different times. In those cases, the issue may not be whether the estate is entitled to the asset, but rather which living individual is the rightful beneficiary. That kind of dispute is generally outside the jurisdiction of the Surrogate’s Court and belongs in Supreme Court, New York’s court of general jurisdiction.
Pursuing the wrong type of proceeding in the wrong forum can lead to delays, wasted legal fees, or even dismissal of your case. A careful legal analysis at the outset can help you determine the proper venue and legal strategy.
Why This Process Matters
Challenging a beneficiary designation through SCPA 2104 is a powerful tool—but only when used in the right circumstances. It can be essential when:
- A last-minute change appears suspicious
- A caregiver or unrelated party is named without explanation
- The decedent may have lacked capacity or was under undue influence
- The designation contradicts years of prior estate planning
Final Thoughts
If you suspect a beneficiary designation was improper, don’t wait to take action. But proceed carefully: the nature of the dispute—especially when it involves competing claims by living persons—can affect the court’s ability to hear the case.
If you need help evaluating whether you can set aside a beneficiary designation or starting a proceeding, contact our office. We have extensive experience with fiduciary litigation and Surrogate’s Court matters across New York.
For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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