Under Texas law, one who is named as a life insurance beneficiary can challenge a later beneficiary change on the grounds the decedent lacked sufficient mental capacity or was the victim of undue influence. The aggrieved beneficiary can file an action to impose a constructive trust on the proceeds. In In re Estate Of Wallis, the Tyler Court of Appeals discussed Texas law in this regard:
It is well established that the beneficiary of a life insurance policy has at least an estate in anticipation sufficient to authorize the beneficiary to raise the issue of the decedent’s mental capacity to change the beneficiary designation. Westbrook v. Adams, 17 S.W.2d 116, 120 (Tex. Civ. App.–Fort Worth 1929), aff=d sub nom., Adams v. Bankers= Life Co., 26 S.W.2d 182 (Tex. Comm=n App. 1931, holding approved). Almost seventy years after Westbrook, the Waco Court of Appeals held that equity may entertain jurisdiction of a suit by an original beneficiary of a life insurance policy to set aside a decedent’s change to another beneficiary on the ground of undue influence and to enjoin the payment of the policy to the latter. Cobb v. Justice, 954 S.W.2d 162, 167-68 (Tex. App.–Waco 1997, pet. denied) (quoting 4 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 60:72, at 60-132 to 60-134 (3d ed. 1996)); see also Tomlinson v. Jones, 677 S.W.2d 490, 492-93 (Tex. 1984) (former beneficiary of life insurance policy has right to contest change of beneficiaries on ground that deceased insured was incompetent at time change was executed). And a constructive trust is available as a remedy when a beneficiary designation has been wrongfully changed. See Hudspeth v. Stoker, 644 S.W.2d 92, 95-96 (Tex. App.—San Antonio 1982, writ ref’d) (trial court justified in imposing constructive trust on life insurance proceeds where decedent had changed beneficiary designation in violation of property settlement agreement in divorce). An assertion that a person wrongfully changed a beneficiary designation form is a distinct legal claim arising from a set of circumstances separate from a challenge to a will. Kongs v. Harmon, No. 03-97-00444-CV, 1998 WL 394177, at *2 (Tex. App.–Austin July 16, 1998, pet. denied) (not designated for publication).
In this case, a person granted power of attorney changed a beneficiary designation to benefit himself. The court found this was an abuse of fiduciary duty and imposed a constructive trust on the proceeds.