Many estate disputes and will contests happen simply because assets are not divided equally. Heirs expected that they would all get similar inheritances from their parents. When it turns out that someone gets far less than someone else, a dispute may occur because they think that it’s the result of undue influence, a fraudulent will or simply a mistake.
One way in which this could happen is with life insurance. For instance, say that the will says that a person’s assets are all supposed to be divided evenly between that person’s heirs. However, the life insurance company only pays out the entire policy to one individual. Does that policy need to be split up evenly, and could this be grounds for a dispute?
It depends on the beneficiary designation
A key thing to remember here is that the will itself doesn’t actually matter. Unless the life insurance policy is paying out directly into that person‘s estate, it is not governed by the will. Instead, it is governed by the beneficiary designation. The life insurance provider is simply going to pay the person who was named as a beneficiary when that policy was set up.
What may have happened is that the person who purchased the policy only listed one beneficiary at that time. They never went back and updated the designation, even though they wrote a will saying that everything should be divided evenly. But there is no way to dispute this as long as the designation has been adhered to properly by the life insurance company. Even if the will gives contradictory instructions, they are not legally binding.
This can certainly create a complicated situation, so all involved need to know about their legal options.