My brother bought a life insurance policy for his children and put a trusted friend as beneficiary because children were minors. He had a straoke and never changed the beneficiary. Everyone knows this money was for his children. Well he kept all the money and will not give his children anything. Can my brothers children sue him. There are many people who will testify to this.
2 Answers from Attorneys
Beneficiary disputes to life insurance claims are common in the context of divorce, where spouses will argue a divorce did not end their beneficiary. They are less common in the context you describe, but still doable.
There are a variety of ways to challenge the trusted friend's beneficiary status. The first will be that he did not have the proper interest to be the beneficiary. The law prohibits people from "gambling" on others' lives.
The children may be able to prevail, but it will require a lawsuit.
This is one of the worst planning options that people use too frequently. The children, or their guardian, should seek counsel. Possibly they can argue that there was an oral trust between decedent and trusted friend.