RE: As the beneficiary of life insurance do I have to spend the money a certain way?
I was the beneficiary of my ex-husband’s life insurance. I gave some of the money to his children and some of it I have kept back for other children. The children who still have money under my control are complaining about the fact that I won’t just give it to them and try to “guilt” me into just handing them the money. I am trying to do what I think their father would do if he were alive and had the money. Since I was the beneficiary do I have to give them anything at all? They seem to think because he was their father and we were divorced that I do not have the right to say what happens to the money and since I have set it aside as theirs they can just do with it when they want and as they want. I just don’t want the money to be spent frivolously and then when they need it there will be none there.
Life insurance is paid to the beneficiary to do with as they wish. You are absolutely not obligated to pay anything to anyone. An estate is a different story, but life insurance is independent of the estate (sometimes used to state planning though).
Here is what I would say; If he wanted them to have money immediately, he would have made them the beneficiary on a policy. Since he did not, they will get it when you decide to give it to them.
They cannot sue you; a lawyer wouldn’t take the case because they wouldn’t win.