My mother-in-law left her million dollar life insurance policy to my brother-in-law, but her will says she wants him to share it with my husband. What can we do?

Dear Quentin,

My husband and I took care of my mother-in-law for eight years. About five years ago we gave up the house we were renting to save her house because she couldn’t afford it and she couldn’t live on her own anymore. We ended up taking out a loan to buy his house. It was not offered and we did not incur its debt; instead, we paid what the house was appraised for.

My mother-in-law passed away in February and the only thing she had for her two sons was a $1 million life insurance plan. She only added my brother-in-law as a beneficiary, but said in his will that he should share it with his brother. My brother-in-law says we inherited the house, even though we paid full price for it and took care of it, without his help.

Can we do anything else so my husband can get what his mother wanted him to have?

Unlucky in Tennessee

Dear Unlucky,

Your brother-in-law is on solid ground, legally if not ethically. In most cases, a beneficiary designation on a life insurance policy takes precedence over a will. The first is a legal contract between the policyholder and the insurance company. It’s a cautionary tale for anyone with a life insurance policy to change beneficiaries to align with their wishes.

Chances are your brother-in-law knows that you bought your mother-in-law’s house and any profit she made was deposited into her bank account and used for her care. It never hurts to put such transactions in black and white. Seeing this may – or may not – change his opinion. “You’ve Got Home” gives it an easy, if not compelling, “exit”.

However, it is possible to revoke a life insurance beneficiary designation if it explicitly goes against the terms of a divorce decree. In the case of “Sveen v. Melin” of the Supreme Court, the children of the deceased received the proceeds of the life insurance policy, not the ex-wife named as the beneficiary in the agreement.

The law presumed that what her ex-husband wanted after their divorce was incorrect. The decision stated: “Thus, if a person designates a spouse as the life insurance beneficiary and later divorces, Minnesota law provides that the beneficiary designation is automatically revoked. At least twenty-eight other states have enacted similar divorce revocation laws.

You and your husband, on the other hand, are probably out of luck and have to rely on your brother-in-law’s discretion. Sounds like he’s unhappy with how you handled the purchase of the property and/or he knows the $1 million insurance policy belongs to him regardless of the will, and he’s already imagining plans for spending the money.

Yoyou can email The Moneyist for any financial and ethical questions related to the coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

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More Quentin Fottrell:

“I felt like a stranger all my life”: My father passed away without a will, leaving behind my mother-in-law and her 4 children. Do I have rights to his estate?
• “He was in love with her”: my brother had a drinking problem and committed suicide. He left $6 million to his ex-girlfriend who bought him booze
• “She had a will, but it was null and void”: My friend and her sister fight over their mother’s life insurance policy and bank account. Who should win?


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