I know I referred to the annuity as an insurance policy, but the same "rules" apply. If there was a beneficiary designation form filled out it supersedes the will or trust document. If there is no beneficiary designation form the proceeds should be distributed to estate will be handled per the terms of the will.
The fact they distributed the proceeds to her and not to the estate tells me this could very well be the issue. Its also probably why the uncles are in such a snit.
We've had the same issue at our business once. Our company offers a small $20,000 life insurance policy, an employee named his wife as beneficiary. Later he divorced her and remarried. 10 years later he was killed leaving behind the wife and children. He had other insurance and assets and it all went to his current wife - but the little $20,000 policy was paid to his ex-wife - much to the shock and horror of his current wife.
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