When you buy life insurance, you have specific beneficiaries in mind for the money, such as a spouse or children.

Naming and changing a beneficiary is something only the policy owner can do. After your death, it is extremely difficult, if not impossible, for anyone to change or dispute the beneficiary.

Unfortunately, many policyholders don't make sure that their policies reflect changing life circumstances, such as divorce. The end result is family members who are left empty-handed and fighting over the insurance money.

When can you dispute?

There are very limited instances in which a life insurance beneficiary can be disputed. For example, if a man's policy still has his first wife as the beneficiary, his second wife could challenge the beneficiary designation after his death. To do so, the second wife would have to notify the insurance company of her challenge. While the dispute is being decided, the insurance company pays the benefit to a trust held by a state court, and that court then decides the legitimacy of any challenge.

"It happens all the time," explains Juan P. Gonzalez, a claims attorney and founder of J.P. Gonzalez-Sirgo law office in Miami. He says the policyowner should understand that designating a life insurance beneficiary is not a one-time event.

"You should review your policy on a regular basis, and avoid falling into the trap of believing you are stuck with leaving the money to one person. You can leave it to more than one person and you should revisit the beneficiary designation each time there is a major life change."

Life insurance companies will take no role in any beneficiary dispute — only a court can reverse a decision that's on the life insurance contract.

"It’s tremendously difficult to dispute a beneficiary after the fact because it's a signed contract that is considered unrefutable," warns Gonzalez. "In order to dispute a claim, you have to be able to show that fraud was committed when the policyholder named the beneficiary. Often times when there is a dispute, it is related to the beneficiary being changed to a friend or someone who got involved in their life toward the end."

In other cases, Gonzalez says the person disputing the beneficiary can attempt to show that the policyholder was coerced or under duress by the new beneficiary, but it is an uphill battle to prove cases like this in court.

"They have to prove that their mother, father or sibling was taken advantage of by this person. Those kind of claims end up getting worked out only because the attorney fees start to exceed the amount of the policy. When this happens, the two parties usually work out some kind of agreement to split the proceeds."

If your beneficiary change will be controversial, let someone know.

"Don’t just do it with no one knowing about it," advises Gonzalez. "If you do this, rest assured it is probably going be contested. Take a long hard look at the reasons behind making this change and tell as many people as possible about it, especially those who might be affected the most by your decision."

Gonzalez adds that this is paricularly important if you decide to make a change at the last minute because you are seriously ill.

"You want to show evidence that you really reflected on the change and discussed it with others," he says. "It's best to make the appropriate changes in front of the family attorney so they can witness your state of mind and notarize the change if needed."

Gonzalez also advises heading off disputes before they start. "Going to your family and telling them who beneficiary is on the policy is also a good way to make your intentions clear. You want to create a situation where there will be no room for debate."