Most of the time the answer is easy: whoever is listed as the beneficiary gets the policy proceeds. Such designation will override the terms of a will.
However, in some circumstances the answer is not so simple. Claims to life insurance proceeds often must be evaluated under both Texas and federal law. Some factors to consider:
- Was the policy owner married when the policy was purchased?
- Did the policy owner get divorced after the policy was purchased?
- Did the policy owner remarry?
- Was the policy bought directly or through an employer?
- What was the source of the premium payments?
I have found that many attorneys have difficulty evaluating these claims. That is likely because they can involve a mixture of Texas community property laws and federal ERISA regulations. In some cases, designating someone other than a spouse as the beneficiary creates a fraud on the community claim. But such claims can sometimes be preempted by ERISA.
It is very important to contact an appropriate attorney to evaluate life insurance claims. The advice you get from friends and relatives will very often be incomplete or simply wrong.