Sister reveals how her brother's ex-girlfriend is getting his $250,000 life insurance payout - in heartbreaking cautionary tale which should serve as a warning to ALL Americans

A beneficiary designation can often take precedence over a will, experts warn READ MORE: Woman receives ex's retirement despite breaking up 30 years ago

On Thanksgiving last year, Dawn Williams had a casual conversation with her brother Dave about the state of his estate planning.

She had been working on creating a trust and wanted to see what stage he was at. The siblings, both in their early fifties, were the only remaining members of their family as both their parents had passed away.

He was never very good at that kind of thing, but Dave reassured his sister that he would pass everything onto her, and would work on changing the primary beneficiary listed on his $250,000 life insurance policy.

His ex-girlfriend was still named on the form despite the fact the relationship had ended.

But on December 31, Dave passed away in his sleep after a brief illness. He did not have a will and he had not gotten around to updating his life insurance policy.

Not long after his death, his ex cashed the policy out.

Dawn's brother Dave passed away before he had updated his life insurance beneficiary

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Now, not only is Dawn dealing with the sudden death of her beloved brother, but she is grappling with the shock - and anger - she feels about what has happened since.

After Dave's death, Dawn contacted an attorney who told her that the insurance company would go by what was on the paper, and it would be very difficult to contest that.

But he suggested that insurance companies have a form which can be completed by the primary beneficiary, to essentially direct the payment to another recipient.

'I wrote her a letter expressing that while I know they had a deep love, that was over, and I explained the conversation I had with him at Thanksgiving,' Dawn told DailyMail.com.

'I requested she honor his wishes and sign the form. But I never heard anything back. But then I saw about a month later that everything had been cashed out and closed out.'

There were no financial ties or emotional ties between them to justify this, Dawn said.

'No shared property, belongings or financial accounts. They had no children together. Their relationship was over and they were both moving on.'

Despite everything, Dawn is not considering legal action.

'If it didn't come out in my favor then I would be out thousands of dollars in attorney fees,' she said.

Dawn's heartbreaking story serves as a cautionary tale, reminding Americans how much beneficiary forms on life insurance policies, retirement accounts and bank accounts really matter.

The designation can often take precedence over a will, even if it was filled out decades prior.

A dispute over a beneficiary is also every family's worst nightmare when they are dealing with the death of a loved one.

'You don't want to deal with it. You just want to grieve and figure out how to heal. You don't want to fight or anything,' Dawn said.

A beneficiary designation can often take precedence over a will, even if it was filled out decades prior

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Dawn's experience highlights the need for greater awareness around the risks of outdated or incomplete beneficiary forms.

And the more money that is held in an account, the riskier it becomes - which can lead to nasty disputes for families.

In Pennsylvania, a decades-old beneficiary form has ignited a fierce legal battle over a retirement fund totaling over $1 million.

Margaret Losinger, now 68, dated Jeffrey Rolison in the 1980s, according to court documents obtained by The Wall Street Journal.

Rolison worked at a Procter & Gamble plant, and named Losinger as the sole beneficiary of his retirement plan on a handwritten form in 1987.

The couple moved in together, but ended up breaking up after two years. Rolison never updated the beneficiary designation before he died in 2015, aged 59.

Now Rolison's two brothers, Richard and Brian, are contesting Losinger's claim over the fund, which has grown to over $1.15 million.

Richard told DailyMail.com: 'The whole thing's been overwhelming.'

The brothers have fought Losinger and P&G in court, arguing that the company failed to properly inform Rolison about his beneficiary options.

P&G claims they provided adequate warnings, including online statements and service provider change notifications.

One such message stated: 'You don't have any beneficiary designations online. Any prior beneficiary designations on file with the Plan will be retained by P&G, but are not viewable on this site.'

The brothers argue this message was unclear and could have been misinterpreted by Rolison. They believe the plan should have defaulted to the estate, which they are co-administrators of, if no clear beneficiary was designated.

The court ultimately sided with P&G and Losinger, but the brothers have appealed the decision.

Back in 1987, Jeffrey Rolison (pictured) named his ex-girlfriend as the sole beneficiary on a handwritten form

Rolison's brothers are taking legal action (Pictured: Jeffrey Rolison, left, Brian Rolison, right, and Brian's son, Nick, center)

The rules around inheriting retirement accounts are already complex by nature - even if there is no dispute.

This means it is absolutely crucial Americans are on top of their beneficiaries.

Not having anyone listed as a beneficiary can also cause problems, said Peter Gallagher, managing director of Unified Retirement Planning Group.

This can cause delays with transferring funds or lead to a lengthy probate process for families.

'List someone as your beneficiary, and be sure to change it if your circumstances change,' Gallagher told DailyMail.com.

Dawn hopes her story will serve as a warning for others.

'I can't dwell on this awful situation and know I'm going to have to let it go otherwise it will eat me up inside,' she said. I'm working on it, but not there yet.

'My heart goes out to anyone having to try and deal with contentious situations especially when grieving a loved one. I can't express how important it is to make sure your loved ones know to get things in order.

'You never know how much or little time you have left.'