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

UPDATED: Dec 27, 2013

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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