For eight years, my husband and I were responsible for the care of my in-laws’ mother. We moved out of the rental house we’d been in for the past five years so that she could keep the house she’d spent so many years in. We needed a loan to buy her house, so we applied for one. We did not take on any of her debt by purchasing the home at market value.
My wife’s mother passed away in February, leaving her two sons a $1 million life insurance policy. My sister-in-law only named my brother-in-law as a beneficiary, but her will specifies that he divide the inheritance with his sibling. Even though we bought the house and supported my sister-in-law without any assistance from him, my brother-in-law insists that we inherited the property.
How else might we help my husband realize his mother’s dream for him?
Unfortunate in the Volunteer State
In a legal sense, at least, your brother-in-law has a good argument. A life insurance policy’s beneficiary designation takes precedence over a will almost always. The former consists of an official agreement between the policyholder and the insurer. A lesson for all who have life insurance but haven’t updated their beneficiary designations in accordance with their goals is to be learned here.
You can assume that your brother-in-law knows that you bought your mother-in-house law’s and that the money she received from the sale went straight into her bank account so she could pay for her own care. Having such deals written down is always a good idea. That might convince him otherwise, but it might not. A simple, if not entirely convincing, “out” for him is “you got the house.”
A divorce decree can be used to invalidate a life insurance beneficiary designation if it is in direct conflict with the decree. Although the decedent’s ex-wife was listed as the policy’s beneficiary, the Supreme Court ruled in Sveen v. Melin that the money should go to the deceased’s children instead.
After their divorce, the law automatically assumed that her ex-husband was wrong about what he wanted. A divorce in Minnesota automatically nullifies a beneficiary designation that names a former spouse as a recipient of a life insurance policy, according to the ruling. Similar “revocation upon divorce” laws have been passed in at least 28 other states.
Conversely, you and your husband are likely out of luck and will have to rely on your brother-in-good law’s judgment. Either he is unhappy with the way you handled the property purchase, or he is aware that the $1 million insurance policy is rightfully his regardless of the will and is already plotting how he will spend it.
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Extra Quentin Fottrell Content:
• “I have always felt like an outsider”: My dad passed away intestate, leaving my stepmother and her four kids to fend for themselves. What, if any, claim do I have on his estate?
My brother had a drinking problem and committed suicide because he was obsessed with her. A former girlfriend who used to buy him alcohol will inherit $6 million from him.
She had a will, but it didn’t matter because it was invalid: My friend and her sister are arguing about who should get their mom’s life insurance and money. To whom should victory go?
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