I have a probate, will/life insurance question. The situation

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I have a probate, will/life insurance question. The situation is my father passed recently. I am named as the personal representative of the estate and filed with the probate court. On his life insurance, I found out due to a error in 2000, the previous named benefiancies were "voided" and the insurance has no benefiancies. I filed a claim affidavit with the insurance company naming his next of kin-myself, grandmother (his mom) and stepmother as claimants. I was the only person to receive a claim form back. The insurance company states is that they will determine who is the benefiancy. The will, it states that all assets of the estate, including residue, be divided into thirds--me, stepmother and stepsister. Question 1, if the policy is paid to me, does the will make me give my stepmother and stepsister 65% of the policy and me 35%? 2. If the policy is paid to me, does it pass outside of the estate and will provisions? Should I retain legal advice if sued by Stepsister? Thanks.

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Ypsilanti, Michigan

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Hi,

Sorry for the loss of your dad. Life insurance policies with named beneficiaries pass outside of the will/estate. If a policy names "the estate" as the beneficiary...it would pass under the residuary clause of the will unless the will had some clause that specified something like "I give all stocks, bonds, annuities, life insurance policies where I could have named a beneficiary , but failed to or did so improperly to X", but that would be rare.

The insurance company is obviously leaning toward interpreting the policy with the voided beneficiaries as effectively reading "payable to my estate" and frankly I think that is the correct result. It would NEVER be payable to you personally....you are only the personal representative/executor. And the insurance company clearly cannot decide to award the proceeds to the "voided" beneficiaries because that would be in direct contradiction of your dad's wishes.

Rich Licata

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Reply to Richard V. Licata's Post: Thank you for your response. I have read the will again and it does not state the above information, sadly. I do have a additional question. Since, it appears the life insurance is going to be paid to the estate my Father had a deeply concerning IRS debt (jointly with my stepmother) that probably would have to be paid. Could I offer a one-time payment to the IRS for his "to be determined" portion or would the IRS take the total amount, and void any portion that my stepmother, who also had libility in this debt, would have? Would this portion, if taken in the entire amount, come just out of my stepmother 1/3 or the entire policy, regardless of the will provisions?

Great question. I suspect only the IRS agent assigned to the case would know. But effectively, I would think it is academic. The IRS will take its money. Whatever is left, when you distribute the money you deduct from your step mother's 1/3....the 1/2 of the tax liability she was responsible for to the IRS. She could owe the estate money!!!!! ....depending on the numbers.

Rich Licata

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