Just a presumption, of no more value than any other contained in this thread.
Fact is, the person who set it up, set it up to pay to her, (for reasons we can only conjecture about, through the mists of time). It was then forgotten about by everyone involved. The person who set it up had the ability to change it, at any time, for any reason, and did not do so. Nor did they tell her what they wanted if…, this, that or the other.
So it’s hers by his action. There is no directive to do one thing or another with it, so it’s left to her to do with as she sees fit.
She is under no moral obligation to guess the intentions of someone who didn’t care enough to arrange it as they wished, or leave directions, in my opinion.
“Cash value” does not mean what you think it does. It is a term of art in the insurance industry and refers to the amount of money due the owner of the policy should he decide to cancel the contract.
Jane is the only beneficiary, it’s her money to do with as she wishes. She is Sam’s mother, the one who supported him for his whole life and this money would offset some of those expenses. IMO, this money is child support that she never got until now. I have a hard time with a child, even a grown one, telling a parent how the parent’s money should be spent on them.
If I were Jane I would use this money the same way I use any other money. If my son is in need and I have the means, and I don’t think it is a waste, I will help. If it thought he would spend it on drugs and booze, no help. In that case I might put it in a tust for the grandchild.
While I see your point, “supporting him for his whole life” isn’t quite true. He hasn’t been supported for 30 years and when he did live with his mother, the father paid child support and alimony. The policy was put in place in the event John died and couldn’t pay his child support which he ended up doing faithfully.
This is Sam’s point. The money should be HIS and not HERS since she got hers via child support many years ago.
That was the responsibility of the parents. The money was intended for Sam, and not for Jane. One can surmise that John would want Sam (or perhaps Sam’s child) to recieve the money as a gift, but not that Jane should receive the money as a gift. That’s what it would be for either at this point, a gift. But Jane is owed nothing.
Legally, it’s hers, it’s a life insurance policy and she is the beneficiary.
Now, John had the right, before his death, to cash out this asset, and distribute the proceeds along with the rest of his estate, to Sam. The fact that he did not does not suggest that he wanted Jane to have the money, particularly if he didn’t give Jane anything in his will, and didn’t mention it to anyone.
Morally, I would see this as money that was mistakenly given to Jane, rather than given to Sam as part of the estate. It doesn’t really matter what it was initially set up for, it was an asset that John mistakenly did not cash out prior to his death. If someone other than Sam was the heir to John’s estate, that person should get the money.
Now, if I were Jane, and thought Sam was a spendthrift, I would probably use my “finders keepers” power to direct the money to the grandson as a trust.
Really the only question Sam should be asking himself is - Is this enough money to risk my relationship with my mother? Using most of the arguments presented here are likely to cause a permanent rift. The money is legally Jane’s and since she’s already indicated that she feels that’s the end of the story he can ask but he’s got to be prepared for her to say no.
Jane should also be thinking - Is this enough money to risk my relationship with my son? but we don’t have a conduit to convey that to her.
The second question is the real one. Jane should be more mature and have the wisdom to realize what is morally correct. Legally though, Sam is up shit’s creek.
I’d also like to point out that while we don’t have a way to speak to Jane, she also doesn’t have a way to speak to us. My children are in their 20’s now and they still have no idea that their father rarely paid his child support. I could sue him for it even now, but he’s barely supporting his second family and it’s just not worth it to me to cause that kind of hassle.
Maybe John didn’t pay all his child support, maybe the terms of the divorce agreement aren’t what Sam thinks they are. Not many children, even adult children have access to that kind of information about their parents.
My mother died leaving me as executor of her estate. The financial part was set up in an IRA which she made with me as the beneficiary. However, the terms of her estate were specific, and I knew what her wishes were. Legally, the entire IRA (about $250K) was mine. However, I distributed in accordance with her wishes, which were plain.
If John died after Sam was grown, so Jane was not solely responsible for his upkeep as a child, the money should go to Sam. If John died never having paid any child support so Jane was responsible for all Sam’s costs, I’d say she’s entitled to the amount she should’ve been paid in child support. If Sam’s a drug abuser who will shot the inheritance up his arm, Jane should retain legal posession and leave it in trust to the grandson.
Is the money enough that the interest would make a difference in their lives? If so, then I’d say put it into a revocable trust and divide the interest three ways - Jane, Sam and G’Child’s 529 account.
If it’s only $15k or so, then divide the principal three ways in the same fashion. This way Sam benefits from 2/3s of the money, but Jane gets a slight increase in her standard of living.
These are, of course, moral judgments, legally she’s perfectly within her rights to keep it all and use it as she wishes.
As for advice to Sam? Ask, once and only once, for something that will help him out of his current straits. tuition? Down payment? vehicle? The amount and his circumstances change what is reasonable. He hsoudl ask once and then never bring it up again.
Morally though, I would say that she should at least pay him back for the funeral out of it.