You can only give away what you own.  California is a community property state, so each spouse owns half of everything.  You husband's father was allowed to gift his half of the annuity policy to your husband; however, he can't give away his wife's half.  So, your husband is the beneficiary of his father's one half community property interest in the annuity, your husband's father's wife gets the other half. That said, if they had a prenuptial agreement that made his earnings his separate property, then your husband owns all of the annuity, but absent that or a similar agreement, he gets half.Best of luck.