Yes. In almost all situations, a life insurance beneficiary designation overrides a will.
Life insurance proceeds are paid according to the beneficiary designation on file with the insurance company, not the instructions in a will, trust, or estate plan. This is one of the most common and misunderstood issues in estate planning and life insurance disputes, and it regularly leads to unexpected outcomes and litigation after a death.
Understanding why beneficiary designations control, and when they can be challenged, is critical for both policyholders and beneficiaries. When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
Why the Beneficiary Designation Controls the Payout
Life insurance is a contract between the policyholder and the insurance company. That contract includes a written beneficiary designation that directs the insurer who must receive the death benefit when the insured dies.
Because the policy is contractual and non-probate in nature, the insurance company is legally required to follow the beneficiary designation on the policy. The insurer does not look at the will, does not interpret estate planning documents, and does not attempt to reconcile conflicting instructions.
If a will says one thing and the life insurance policy says another, the policy always controls.
Example
A parent’s will states that all assets should be divided equally among three children. However, the life insurance policy names only one child as beneficiary. When the parent dies, the insurance company pays the entire policy benefit to the named child.
The will does not override the policy, even if it was signed later. The other children may feel the outcome is unfair, but legally, the insurer acted correctly.
Why Life Insurance Bypasses Probate
Life insurance proceeds pass outside of probate by design. This allows beneficiaries to receive funds quickly and without court involvement.
Because probate courts only control assets that belong to the estate, they generally have no authority over life insurance proceeds unless the estate itself is named as beneficiary.
As a result:
• The will does not govern life insurance
• Probate judges cannot rewrite beneficiary designations
• Executors have no authority over life insurance payouts
This is why beneficiary designations must be treated as standalone legal instructions, separate from estate planning documents.
The Danger of Outdated Beneficiary Designations
Outdated beneficiary forms are one of the leading causes of life insurance disputes.
People frequently forget to update their policies after major life events, including:
• Marriage
• Divorce
• Remarriage
• Birth of children
• Death of a previously named beneficiary
If a former spouse remains listed as beneficiary, that person will often receive the proceeds even if the will leaves everything to a new spouse or children.
Some states have automatic revocation statutes that remove ex-spouses as beneficiaries after divorce, but these laws are inconsistent and often do not apply to:
• Employer-provided life insurance
• ERISA-governed plans
• Federally regulated policies
Relying on a will to fix an outdated beneficiary designation is one of the most common estate planning mistakes.
When a Life Insurance Beneficiary Designation Can Be Challenged
Although beneficiary designations usually control, they are not immune from legal challenge. Courts will intervene when there is evidence that the designation was invalid or improperly created.
Common grounds for contesting a life insurance beneficiary include:
• Fraud or forgery
• Undue influence or coercion
• Lack of mental capacity when the change was made
• Violation of a divorce decree or court order
• Insurer error in recording or processing the designation
• Community property or marital property violations
These cases are highly fact-specific and often require litigation.
What Happens When a Beneficiary Dispute Arises
When multiple people claim entitlement to life insurance proceeds, insurers frequently file an interpleader lawsuit. In an interpleader action, the insurer deposits the policy proceeds with the court and asks a judge to decide who is legally entitled to the money.
At that point:
• The insurer steps out of the dispute
• Claimants litigate against each other
• Evidence and legal arguments determine the outcome
This process can take months or years and often requires experienced legal representation.
Special Situations That Commonly Create Conflicts
Divorce and Remarriage
Divorce decrees sometimes require a spouse to maintain life insurance for a former partner or children. If the policyholder later changes the beneficiary in violation of the decree, courts may impose a constructive trust or redirect proceeds.
Community Property States
In community property states, a surviving spouse may be entitled to a portion of life insurance proceeds if premiums were paid with marital funds, even when someone else is named as beneficiary.
Powers of Attorney
A person holding power of attorney generally cannot change a life insurance beneficiary unless the document explicitly authorizes it. Many beneficiary changes made under POA are later overturned.
Minor Beneficiaries
If a minor is named directly, the court may require guardianship or custodial oversight before funds are released, delaying payment and increasing legal costs.
Key Takeaway
A will does not override a life insurance beneficiary designation. The policy controls, and insurers are legally required to follow it.
If the beneficiary designation does not reflect the policyholder’s current intentions, the only fix is to update the designation directly with the insurance company while the policyholder is alive and competent.
If a dispute already exists, or if a claim has been delayed or denied due to beneficiary issues, legal intervention may be necessary to protect your rights.