Overpayment dilemma

Parent died; Submitted death claim via funeral home (for ease & speed). Funeral home confirms policy is sufficient to cover funeral expenses so that portion is assigned to them. Funeral home also confirms identity and qty of all Life insurance beneficiaries (6 total) since insurance shared that info. All 6 beneficiaries submit death claims, within 30 days payment sent via check to all beneficiaries, less funeral expenses. Within 4 days, insurance Co. calls stating beneficiaries form deemed invalid, so payment now default to order of relationship to deceased. 3 original beneficiaries, that now are disqualified, have spent their payouts, another beneficiary ended up getting a returned check due to stop payment. Payout now defaults to 2 biological children who receive 2nd payment for difference 50% minus 1st payment. Repayment letter sent to disqualified beneficiaries says "our office feels strongly we should recover all payments not due by law or obligation" Question: For disqualified beneficiaries that no longer have original payout funds, what will likely happen to them.

submitted by /u/Rustybmor
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