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Our fraternity had their lawyer look through our Constitution, ByLaws, Standing Rules and Policies for any legal claim we could have on our badges. And they basically said, there is none. Like wptw said, possession is 9/10s of the law, a court is going to favor the person in possession of the badge, whether it's the person it was originally issued to or not.
So the best way to combat this is to educate your members. Have them put a clause in their will; tell their family what they want done; have it written where they keep their badge; teach them on the proper ways to ensure their badge doesn't end up where it doesn't belong.
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It's gonna be a hootenanny.
Or maybe a jamboree.
Or possibly even a shindig or lollapalooza.
Perhaps it'll be a hootshinpaloozaree. I don't know.
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