I am handling all financial affairs right now for Father and a disabled brother.

If all 3 are primary, all three cannot receive 100 percent. If brother is disabled and on Medicaid, the state will take all that he gets. Try to avoid that.

I agree, you cannot change what your father has set up. Its also correct that leaving money to a disabled person causes problems with Medicaid and Social Security. He may lose benefits till the money received is spent down then u have to go thruv the whole process again. If someone wants to leave money to a disabled person you may be able to set up a Special Needs trust. SS and Medicaid cannot figure in this money when establishing income. Like said, a beneficiary of an insurance policy is not obligated to use the money on bills, funeral, etc. Its their money and taxes are not paid on it. For everyones info, in the state of NJ, at least, a person with Alzheimers cannot inherit money.

You can wait to contact the life insurance company after a death....like wait months or even years. it's like doing an estate distribution, the executor can wait & should wait before a distribution as per a will. Now family that's 1 will reading from being able to buy a used car won't be happy, but an excutor can take thier time within whatever your state laws provide.

If your doing probate, the probate atty will likely know how to set up a special needs trust for a disabled heir if need be so that a heirs medicaid status isnt jeapordized. Or will know who to refer you to for an SNT.

Assuming your father is the named beneficiary of the policy, it is his right and choice to decide how the policy proceeds should be distributed. Naming all 3 beneficiaries would be sharing the proceeds, with 1/3 to each. Apparently that's not what your father wanted.

What you need to check also is his will, to ensure that it includes the policy proceeds as assets. If so, after death assets are first directed to pay the expenses of his last illness. To me, this would include the funeral expenses.

The method of beneficiary designation now is a contingent one: you first, then contingently the other two, if you predecease him. At least that's how it sounds from your description.

I do think you need to find and review that will though, and if a general asset description doesn't include any insurance policies, contact the attorney who drafted it to prepare a codicil - assuming your father is cognizant to sign one.

GA, the will is not able to direct the insurance proceeds to someone if a beneficiary has been named through the policy.

As far as I know YOU can not change the beneficiaries your Father has to be the one to change the beneficiaries.
You can establish a Will that will direct the payments to go evenly between the remaining 2 sibling. As it is now if your brother does not want to give a portion of his inheritance to his sister he is under no obligation to do so since he would be the primary beneficiary at that time.

There isn't really a problem, is there? It sounds as though your father took this policy mainly to ensure his final expenses were covered; that's what the funds would largely be used for, whoever turns out to be the payee; and you, assuming it's you, will be entirely free to divide whatever cash remains among the three siblings - whether equally or according to need, as you might think best.

So do you really need to change anything?

I agree with Churchmouse. Men don't get to live in VA nursing homes unless there are essentially no private assets, so pathways utilizing attorneys or probate don't apply here. The value of the policy payout here is probably less than $5000 and would have been intended to help with funeral costs and any other simple loose ends. You may even be the one who has to put those expenses on your credit card and get paid back later. So its nice to have that. I would just make sure it doesn't get cancelled for nonpayment of premium.

Vegas, thanks for the clarification. You're right.

Saturn, just occurred to me - what kind of policy is this? Is it by any change a VA policy? If so, it matures at a certain age.

I don't recall what it was for my father, but it matured and the proceeds were disbursed to him even though I asked in writing that the policy be held and not disbursed, which as I recall was an option, but was ignored by the VA.

There's some provision about maturation of VA policies - I don't remember the issues as to whether it was at a certain age or after so many years of the policy being in force.

I think that you should ask an elder law attorney.