If you are your parent's only life-insurance beneficiary, your siblings are out in the cold. None of them can make you share the insurance payout. If the beneficiary designation isn't clearly stated, things may be different. Your sister may also challenge your right to the money on other grounds.
You could have a problem if your parent used general phrasing in the official papers. If the form says the proceeds go to her child or her children, the insurance company will divide it between you and your siblings. The insurer will give your sister a share even if you're convinced your parent meant to give you everything.
If your sister was the original beneficiary, but your father changed the policy before death, your sister could have a case against you. If you were your father's primary caregiver, for instance, she could say you used "undue influence" to pressure him to change the plan, or that he wasn't in his right mind. Even if the charge is untrue, you may end up having to prove it in court: Insurers prefer having a judge decide who should get the money.
Suppose you're an only child and your mother identifies you by name as the beneficiary. If siblings come along later, your mother may not think to update the beneficiary form to include them. Your sister could argue your mother wanted her to share in the money even if it's not in writing. She could even claim she got a verbal promise that she'd update the forms and use that as grounds for a lawsuit.
If your father identified you, by name, as the beneficiary, your sibling's unlikely to win a court case. Claims about what your parent intended to do don't usually have much power compared to the written evidence of his intentions. As long as the court case keeps running, however, the insurer won't distribute the money, and you'll pay a lot in court fees. You may find it more profitable to take the case to mediation and share some of the proceeds with her rather than fight for the whole share.
- MassMutual Financial Group: Understanding Life Insurance Beneficiary Designations
- Insure.com: Can You Dispute a Life Insurance Beneficiary?
- Smith & Johnson: Change of Life Insurance Beneficiary not the Result of Undue Influence
- Sanders, O'Hanlon & Motley: Disputes Over the Rightful Beneficiary of Life Insurance Proceeds
- Nolo: Undue Influence in Estate Planning
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.