Yahoo Finance Grieving sister issues warning after brother's ex-girlfriend cashes out his $250,000 life insurance policy
Getting your financial affairs and estate in order to help your loved ones in the event of your death is hugely important.
As one grieving sister pointed out to the Daily Mail: “You never know how much or little time you have left.”
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Dawn Williams understands just how important this is. When her brother Dave died after a short illness on Dec. 31, she learned he had not written a will or gotten around to listing her as the primary beneficiary on his $250,000 life insurance policy, which she says he previously agreed to do. Both siblings were in their 50s and without their parents.
Instead, the policy still listed his ex-girlfriend as the primary beneficiary, according to Williams — and much to the sister’s despair, the policy was cashed out shortly after Dave’s death.
Legally, the ex-girlfriend was well within her rights to receive payment, but Williams says the relationship with her brother had ended and there were no lingering financial or emotional ties to morally justify the ex-girlfriend receiving the money.
“[They had] no shared property, belongings or financial accounts,” she said. “They had no children together. Their relationship was over and they were both moving on.”
Williams had pleaded with the ex-girlfriend to redirect the funds, and sought the advice of an attorney, but ultimately opted not to pursue legal action. Now, she wants her story to act as a cautionary tale so that others don’t suffer the same “awful” fate.
Honoring the policy
Life insurance companies are legally obliged to honor the wishes laid out by the policyholder. After you pass away, your life insurance beneficiary cannot be changed and all proceeds will go to the primary beneficiary named or to the contingent beneficiary if the primary is deceased.
It’s possible to dispute or contest a life insurance policy, but doing so often requires a complex legal court process, per insurer Aflac, but this can be very expensive, especially if you do not win your case.
Williams was alerted to this process but feared she could “be out thousands of dollars in attorney fees” if she lost what was already an uphill battle.
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The grieving sister had also appealed to the ex-girlfriend’s sensibilities to see if she would fill out a form that Williams’s attorney said allows a primary beneficiary to direct payment to another recipient.
“I wrote her a letter expressing that, while I know they had a deep love, that was over,” Williams told the Daily Mail, adding that she explained the conversation she’d had with her brother regarding his estate before he died.
“I requested she honor his wishes and sign the form. But I never heard anything back. But then I saw about a month later that everything had been cashed out and closed out.”
Keep on top of your beneficiaries
It’s critically important to keep the beneficiary forms on your life insurance policy, retirement accounts and bank accounts up to date so that, if something happens to you, your assets will be distributed as you wish.
Doing this may help to prevent disputes between family members and friends. As Williams pointed out, the last thing grieving people want is to “fight” over a loved one’s assets — “you just want to grieve and figure out how to heal.”
You can help your loved ones by keeping on top of your financial affairs and having an estate plan and a will in place. Any unknowns, missing information (e.g. no beneficiaries listed) or errors can cause delays with distributing your assets and possibly lead to a lengthy and expensive probate process.
“My heart goes out to anyone having to try and deal with contentious situations, especially when grieving a loved one,” Williams said. “I can't express how important it is to make sure your loved ones know to get things in order.”
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
