Can the sole beneficiary of a life insurance policy be told how to spend the proceeds?

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Can the sole beneficiary of a life insurance policy be told how to spend the proceeds?

e had been married a few months and about a month before her passing, we changed the benficiary of her life insurance to me and I signed up for the same type of policy, naming her as benificiary.The family is now suing me for not providing for her son left behind. I had made an attempt, in writing, to reach out to the boy’s father, indicating I wanted to set up a Trust, but did not give specifics. I bought a home and they are suing for every penny, including the home, stating my wife verbally told them how she wanted the money spent and I did not abide, however there was nothing in writing?

Asked on December 27, 2013 under Estate Planning, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

IF the money came to you in a will and/or in a trust, AND the will or trust contained restrictions on its use, those restrictions would generally be enforceable. However, your wife's oral (or verbal) wishes are NOT enforceable in this regard--you may choose to honor them, but do not have to.

If your wife had wanted to provide for her son, she could have provided from him in her will, by making him or a trust established for him the recipient of life insurance, etc.


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