Your parents have passed away, and you are reviewing their will with your siblings to see how they designated that their assets should be divided among you. You note that one significant asset that your parents had was a life insurance policy. However, it’s a source of confusion for you.
In the will, your parents designated that the policy should get split evenly among their children. On the policy itself, though, they just named one beneficiary: your oldest sibling. That was their only child when they bought the policy. However, they forgot to update the policy as more children were born and even when they drafted their current will.
Which one takes precedence? Does the will override that designation? Does your oldest sibling get all of the money, or do you have to split it?
Even though it may feel counterintuitive since the will is more recent, the beneficiary designation actually carries more weight than the will. If it says that only your oldest sibling gets the money, then the will cannot give it to the other children.
The reasoning is that the designation kicks in as soon as your parents pass away. The money gets paid to your sibling. It’s not part of your parents’ estate anymore. Therefore, their will has no legal basis to dictate what is done with that money.
Mistakes and oversights like this can cause a lot of confusion and conflict for children as the will is executed. Therefore, it’s essential to make sure you know what legal options you have and how to move forward.