Can the terms of a final disposition control the payout of a life insurance policy?

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Can the terms of a final disposition control the payout of a life insurance policy?

My sister was the sole beneficiary for my deceased mother’s life insurance policy. My sister verbally stated to the family after the funeral that she would pay for the funeral costs from the policy proceeds. My mother had indicated on the final disposition form that she wanted the funeral costs to be paid from the policy. When it came time for the funeral bill to be paid, my sister refused. I know that legally she is not required to pay as it is not “estate” money. Morally she should pay but that is beside the point. Does the final disposition wishes have any weight in forcing her to pay for the funeral?

Asked on December 4, 2011 under Estate Planning, Wisconsin

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately for you and other members of your family other than your sister who received the life insurance proceeds of your mother's policy, the wishes of your mother as to payment of her funeral expenses from the life insurance policy have no weight legally as to force your sister to pay the funeral expenses from the life insurance policy that she received.

The only caveat would be if there was a provision in the Will or trust of your mother or some writing qualifying as an amendment to the Will or trust stating that disposition wishes that you have written about. Morally your sister should abide by your mother's wishes for payment of funeral expenses.


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