My mother-in-law left her $1 million life insurance policy to my brother-in-law, but her will says she wants to share it with my husband. What can we do?

Dear Quentin,

My husband and I took care of my mother-in-law for eight years. About five years ago we left the house we were renting to save her house because she couldn’t afford it and because she couldn’t live on her own anymore. We ended up getting a loan to buy her house. It was not gifted and we did not discharge her debt. Instead, we paid what the house was appraised for.

My mother-in-law passed away in February and the only thing she had for her two sons was a $1 million life insurance policy. She only added my brother-in-law as a beneficiary, but stated in her will that she would share it with his brother. My brother in law says we inherited the house even though we paid the full price and took care of her without his help.

Is there anything more we can do to help my husband get what his mother wanted?

Unlucky in Tennessee

dear bad luck,

Your brother-in-law is on sound ground, legally if not morally. In most cases, the beneficiary designation in a life insurance policy takes precedence over the will. The first is a legal contract between the policyholder and the insurance company. It’s a cautionary tale for anyone out there with a life insurance policy changing beneficiaries to align with their wishes.

It is possible that your brother-in-law is well aware that you bought your mother-in-law’s house and that any profit was deposited in her bank account and used for her care. It never hurts to put such trades in black and white. Seeing this may – or may not – change his mind. “You’ve got the house” gives him an easy, if unconvincing, “out.”

However, it is possible to overturn the designation of a life insurance beneficiary if it is expressly contrary to the terms of the divorce. In the Supreme Court case “Sveen v. Melin,” the decedent’s children were awarded the proceeds of the life insurance policy rather than the ex-spouse named as beneficiary in the agreement.

The law assumed that what her ex-husband wanted after their divorce was incorrect. The decision stated: “Thus, if a person designates a spouse as the beneficiary of a life insurance policy and later gets a divorce, Minnesota law provides that the beneficiary designation is automatically revoked. At least twenty-eight other states have enacted similar post-divorce revocation laws.”

You and your husband, on the other hand, are probably out of luck and have to rely on your brother-in-law’s discretion. It sounds like he’s either unhappy with the way you handled the property purchase and/or knows that the $1 million insurance policy belongs to him against his will, and is already dreaming up plans to spend the money.

You you can email Moneyist with any economic and ethical questions about the coronavirus at qfottrell@marketwatch.com and follow Quentin Fottrell at Twitter.

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More from Quentin Fottrell:

“All my life I felt like a stranger”: My father died without a will, leaving behind my stepmother and her 4 children. Do I have rights to his property?
• “He was in love with her”: My brother had a drinking problem and killed himself. He left $6 million to his ex-girlfriend who bought him alcohol
• “She had a will, but it was invalid”: My friend and her sister are fighting over their mother’s life insurance policy and bank account. Who should win?

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