Life settlements under attack

The Wall Street Journal reports on an interesting case in which a lawyer arranged for $56 million worth of insurance on his own life to be sold to investors for a few hundred thousand dollars.  The investors paid the premiums after the sale. 

Apparently the lawyer's wife was not privy to the deal, because she now insists that the insurance proceeds be paid to the estate, not the investors.  They didn't have an insurable interest, she argues.

However, one litigant has produced some paperwork suggesting that the wife signed off on the transfer of the policy ownership after it was in force for two years. 

Per the Journal, the life settlement industry had been hot about five years ago, but cooled with financial crash in 2008.