by Guest » Thu Mar 14, 2013 08:27 pm
My father died last month at age 95 and left several relatively small life insurance policies in which my cousin and I are named as co-beneficiaries to split the payout 50/50. Because my cousin was a great help to me during Dad’s final months and she does not get much of anything in his will, I would prefer to just let her have the entire 100 percent benefit on those policies. Is there any way I can just “resign” from my 50 percent with a notarized letter to the insurance company (or something like that) so she can collect the full 100 percent? Is something like this possible? I don’t particularly need the money (it’s not a huge amount anyway) but it would help her out. I would rather do that than file for and collect my half, then write her out a check. If anyone knows if there’s a standard mechanism for doing this, I’d appreciate hearing about it. Thanks!
Posted: Fri Mar 15, 2013 05:16 am Post Subject:
Hi there, I think you can give your share of your dad's life insurance to your cousin only if you have an agreement. Also there is a written papers that you are willing to give your share with your sign and it is notarized to make it validated.
Posted: Fri Mar 15, 2013 01:17 pm Post Subject:
Hi, Tom. That is an excellent question. Unfortunately, Shaan is not giving you good advice.
You have two choices here.
1)You are able to disclaim the benefit, but when you do so, you do not have any say in terms of what happens to it. Depending upon how things are set up, your half may or may not go to your cousin. Therefore, do not disclaim it without being 100% certain what will happen first.
2)If it is a small amount, the simple thing to do would be to collect the money and write a check to your cousin. I know that this isn't what you want to do, but at least it means that you know for sure where the money will go.
Posted: Sun Mar 17, 2013 03:36 am Post Subject:
Shaan is a spammer who tried to insert a commercial link in his post. His advice is incorrect and should not be followed
2)If it is a small amount, the simple thing to do would be to collect the money and write a check to your cousin. I know that this isn't what you want to do, but at least it means that you know for sure where the money will go.
The only problem with this is a GIFT TAX liability to the DONOR (but not the recipient) if the gift is valued at more than $14,000 in a single year. The excess gift is subject to a 35% tax ($350 per $1000 in gift amount), which could be offset with a person's $5,000,000 (plus inflationary adjustments) lifetime "combined exemption" for gift and estate taxes.As was stated, "disclaiming" a non-probate asset would most likely cause that portion to end up in the estate of the decedent where it would first be used for such things as paying taxes, debts, lawyers and court fees . . . just about anything other than going to anyone important. So disclaiming life insurance proceeds is not a wise decision. On the other hand, disclaiming estate proceeds would increase all other beneficaries' share of those. That could achieve the same end result but without the tax liability.
This is not a life insurance matter, it is an ESTATE PLANNING / PROBATE matter. An ESTATE PLANNING / PROBATE attorney would be the best resource.
Posted: Sun Mar 17, 2013 01:46 pm Post Subject:
Max,
I am going to send a trophy to you. It is going to be inscribed "Max Herr: World Record Holder for Most Incorrect Knowledge"
As was stated, "disclaiming" a non-probate asset would most likely cause that portion to end up in the estate
Nobody stated that. It is not "most likely" to end up in the estate. I've been involved with many disclaimers. In all cases that I have been involved, disclaiming the asset was treated as if that beneficiary pre-deceased the insured which allows the money to go to the contingent beneficiary. It usually only makes sense to disclaim after finding out where the money will go.
If there are two primary beneficiaries and no contingent beneficiaries, I am not sure what happens with the disclaimed share.
The only problem with this is a GIFT TAX liability to the DONOR (but not the recipient) if the gift is valued at more than $14,000 in a single year. The excess gift is subject to a 35% tax ($350 per $1000 in gift amount), which could be offset with a person's $5,000,000 (plus inflationary adjustments) lifetime "combined exemption" for gift and estate taxes.
This is only what happens on the federal level. On the state level, the numbers can be different. Additionally these numbers aren't correct. The top estate tax rate is 40%. The current exemption is $5,250,000. This is $10,500,000 per couple, so unless he's a multi multi millionaire, gifting isn't going to be a tax issue.
Posted: Sun Mar 17, 2013 07:33 pm Post Subject:
First thing you need to file with your cousin and you same time. If you will not help her it mean you are wasting time and money both. So help her and she help you.
Now I will discuss with your policy. First you need to read the policy paper so that you need to clear every thing first before filing the case
Posted: Mon Mar 18, 2013 08:32 pm Post Subject:
In re-reading my post, I will agree that "most likely" was an incorrect choice of words. It is a "possibility". This is not an insurance matter as much as it is one of PROBATE LAW. And while there is a "Uniform Probate Code", the states have been anything but uniform in its adoption, and many have altered it significantly.
Disclaiming could result in the money going to another primary beneficiary under per capita distribution rules. On the other hand, it could simply force the money "down" to the heirs of the disclaiming beneficiary under per stirpes rules. Or the policyowner's estate could end up with the money. We don't know how the "co-beneficiaries" were even listed (per capita -- the usual default -- or per stirpes -- usually recommended by an attorney or other adviser, and written on the beneficiary statement). Too many insurance agents don't know the difference and generally don't say anything.
A couple of things are true. If the money is paid before it is disclaimed, a disclaimer is fruitless. A disclaimer must be irrevocable. And a disclaimer must adhere to state law.
So without knowing more, that part of my answer, as described above, was premature.
The current exemption is $5,250,000
Yes, I know that, and it was covered in my parenthetical statement -- it could also come down in the future if we went into a deep recession with disinflation (but we all know you like to argue that we don't know what the future holds, and while inflation is inevitable, like higher taxes, I won't bring up that discussion here) . And yes the "maximum" tax rate is now 40% -- kind of like writing January 1, 2012 on the day after December 31, 2012. Old numbers are hard to forget. But the $10,500,000 combined exemption would not apply to a gift of life insurance proceeds unless both husband and wife were the beneficiaries -- when given in someone's name it is sole and separate property. The life insurance amount in question here is probably some distance away from $5,000,000, let alone $10,000,000.Posted: Sun Mar 24, 2013 02:21 pm Post Subject:
You can make inquiry for such from the Insurance company. I think this will not be a big issue. It is your choice that would like to take the benefits of being a beneficiary or would you transfer such benefits for other. I have also listen about donation in which if we receive any benefits being as a beneficiary we can donate such amount for others. So this kind of help is also given by also give by Insurance company.
However doing such may get delayed in receiving the payments from Life insurance.
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