Q: Life Insurance where beneficiary is deceased
My father in law had a life insurance policy through his job. He had his wife listed as the beneficiary. She passed away last year and he passed away this year. He never changed the beneficiary. The paperwork we received ask for death certificates for both as well as heir information. The life insurance company contacted my husband and spoke to a step sister to verify that he is the only legal child She confirmed the information and a check was issued to him. The executor of my father in laws will is not harassing us for the life insurance claiming it’s part of the estate. Is this true? Is that policy part of the estate?
A: The answer it, it depends. Usually life insurance is NOT part of an insured decedent's estate. However, it can end up being part of an estate if there are no living death beneficiaries when the decedent died. If the life insurance policy listed your father-in-law's wife as his primary beneficiary and his child as his secondary beneficiary, then the life insurance proceeds were properly paid to his child and are not not part of his estate. It kind of sounds like that is what happened.
However, if the life insurance policy only listed the wife as beneficiary and no secondary beneficiaries, then the life insurance policy "might" be part of his estate. I put "might" in quotes because the only way to answer the question with certainty is to review the policy and the latest beneficiary designations on file.
That said, life insurance companies rarely make mistakes when it comes to paying out death benefits because they don't want to be sued for doing it wrong. When they are not certain, THEY are the ones usually asking for a court order. Therefore, most likely the life insurance proceeds belong to your wife and are not part of your father in law's estate.
A: I agree with the previous answer. I would recommend that you consult with a local probate attorney.
The life insurance companies typically don't pay out to the wrong person. They're pretty cautious. So, if they paid it to you, you were probably legally entitled to it. However, to be sure, you'd have to review the insurance contract. The policy itself will assure us that the life insurance either does or does not pay to the Estate.
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