This guy wants to know if he is wrong for keeping his brother’s insurance payout. While he is the beneficiary, his brother also left a wife and two kids behind.
He Lost His Brother
The Original Poster (OP) is a 40-year-old man. His brother was 42 years old when he died in a car accident a few months ago.
His brother left behind a wife and their twin daughters. While OP has been financially successful, with a great job, he has faced ongoing financial struggles. And because money has always been tight, OP and his wife have not been able to start a family.
OP’s brother had a joint savings account with his wife, and they owned a home together, which they purchased after selling their previous individual properties. Money was not an issue for them; they even had a nanny for their girls.
His brother’s wife has a solid career, too, and makes good money of her own. She also has two college-age children from a previous relationship.
After his brother’s death, his wife learned through his employer that OP was named as the beneficiary of both his 401(k) and life insurance policy. The brother had set up both those payouts before he ever met his wife.
His Brother Was His Beneficiary
And, even after he got married, OP’s brother never updated his policies to make his wife the beneficiary.
The life insurance benefit alone paid OP 150k, and the 401(k) was worth a whole lot more. Suddenly, OP was awash in cash thanks to his dead brother.
Once she found out about the financial situation, OP’s sister-in-law approached him and begged for a portion of the life insurance and 401(k). She had inherited her husband’s share of the house and the joint savings account, but that wasn’t going to be enough.
She Asked For More
She explained that without her husband’s income, she would have to sell the house, give up the nanny, and would still struggle to provide for their children. She also couldn’t help her older children pay for college as she had intended.
Without the money from her husband’s life insurance and 401(k), her life would be turned upside down even more than it already had been.
But OP firmly refused to share the money, believing that it had been his brother’s responsibility to update the beneficiary designation. OP and his wife plan to use the money to buy a home and start their own family, prioritizing their own needs for once.
OP’s parents sided with their late son’s wife, arguing that the money should go to his children. They suggested using the life insurance payout to pay off the mortgage, support the older children’s education, and secure the entire family’s future.
They Tried to Compromise
Instead, OP offered to create a trust fund with $50,000 for the girls’ education. However, his parents emphasized the immediate financial strain his brother’s widow was facing and her desperate need to support the family now, not just in the future.
OP is torn between his parents’ expectations and his own desire to prioritize his family’s needs. He is also worried about the long-term strain that keeping the money could put on his relationship with his parents and others in the family.
OP feels conflicted about the decision and sought guidance on Reddit about whether he is being unfair or selfish by keeping the money.
Some commenters sympathize with OPr’s position, agreeing that his brother should have updated his beneficiary information to align with his current circumstances.
Supporting the Family’s Wellbeing
Others argue that the money should indeed go to the brother’s children, emphasizing the importance of supporting their education and well-being.
Several commenters suggest seeking legal advice to understand the implications and potential responsibilities associated with being the beneficiary of his brother’s assets.
Still, others advise OP to have open and honest discussions with his sister-in-law and his parents to find a compromise that considers the needs of both families involved.
Featured Image Credit: Shutterstock / ViDI Studio. The people shown in the images are for illustrative purposes only, not the actual people featured in the story.