Can I choose a third person as my life insurance beneficiary?

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PostPosted: Thu Mar 25, 2010 4:45 pm   Post subject:   

Quote:
In case you show your estate as the beneficiary of your life insurance, then it would add more to the size of your estate,undergo probation and develop the estate tax liability.




Some misinformation here. The "value" of life insurance is ALWAYS part of the owner's estate for estate tax purposes, regardless of who the beneficiary is. This is the reason many people make a life insurance trust the owner instead of personally owning the policy. The trust has a 99 year lifespan. If there is no money in the trust at the end of 99 years (as will probably be true), there is nothing to tax.



Quote:
We recently got a 401K statement in the mail and my husband had me listed as the beneficiary and on this last statement it had said "no beneficiary listed".




Although related under the heading of "beneficiary," this is a very different matter. The disposition of "qualified retirement plan" assets falls under federal law. The rules here are somewhat different than those for life insurance policies/proceeds, which are subject to state law.



Federal law requires that "qualified plan" assets must be paid to a person's current spouse upon death of the account holder. If not married, the beneficiary may be anyone of the account owner's choosing. The only way to get around this is for the spouse to sign off on his/her rights to first position. This is "informed consent."



EXAMPLE: An unmarried/divorced person names their child (minor/adult, immaterial) as the beneficiary of their 401(k), 403(b), IRA, etc. Several years later, the account owner gets married. The new spouse is AUTOMATICALLY the beneficiary of the account, prior beneficiary designations notwithstanding. For the child to once again be the primary beneficiary, the new spouse must consent, in writing, to be replaced. Absent the consent of the new spouse, the child is no longer the primary beneficiary, but would endure as the contingent beneficiary.



Nevertheless, it would be a good idea to contact the Plan Custodian or Plan Administrator and get this resolved, in writing.



[[ Note also that to borrow money from a 401(k) or 403(b) account, if married, the account owner's spouse must give written consent, acknowledging that they are giving up their entitlement to 100% of the account assets to the extent of the unpaid loan balance + interest. Same rules. ]]


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PostPosted: Mon Mar 28, 2011 3:32 pm   Post subject: how do I find out if my ex has a policy  

My ex husband is suppose to have a lifed ins policy for our 2 kids with me being beneficiary. thats in our divorce papers..Unfortunately he lies all the time. So I have no idea if he does or not..should he have to give me a copy? Is there a way to find out if he has one or not?


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PostPosted: Wed Mar 30, 2011 6:40 pm   Post subject:   

If you have a court order, the court will enforce it for you. Simply file an action in family court forcing him to show proof that the policy exists. If he lies to the court, he can go to jail for perjury.



It would be a BETTER idea if you were the owner of the policy. That way, if he failed to pay a premium, you would get a notice of pending lapse and could make the payments and then sue him for the value of the payments. As the owner, you would be able to make yourself or your children the beneficiaries of the policy without fear of being removed.



Some divorce attorneys understand this, and some do not. If you file an action to prove that the insurance exists, add to it a motion to compel ABSOLUTE ASSIGNMENT of the ownership to you. Once that document is executed and filed with the insurance company, it is a done deal. You are the policyowner and in full control. The court can still order him to pay the premiums, or it can order him to pay the money to you and you will pay the premiums. If he fails to pay, you haul his butt back into court and let him explain it to the judge. That kind of a contempt order may be pursued as an ex parte action in some states.



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PostPosted: Mon Apr 04, 2011 11:44 pm   Post subject: Beneficary Fraudtly Changed  

My father passed away in Oct. and I found out six weeks later that the beneficary was changed to my brothers ex girlfriend. My dad had deminta. The will & papers leaves me all. The company my dad retired with is not telling me a thing or my attorney. All my family is deceased and the beneficary died a few weeks ago. Where does this leave me?

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PostPosted: Tue Apr 05, 2011 10:00 am   Post subject:   

The life insurance money was payable to the named beneficiary at the time of your father's death. If you believe there was foul play involved in the change of beneficiary, you would have to take that claim to Civil Court. Now that the beneficiary is also deceased, you can only file against her estate. If there is nothing there, it's a lost cause.



As far as your father's estate, his will governs the disposition of his other assets. You get what you get according to that document and what remains of the estate after the claims of creditors are satisfied.



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PostPosted: Sat Apr 30, 2011 5:43 pm   Post subject: beneficiary question  

My wife's mother died without listing any beneificiaries. Can she claim her insurance? What happens to what she put into the account?


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PostPosted: Sat Apr 30, 2011 11:36 pm   Post subject:   

If your wife's mother had a life insurance policy in force at the time of her death, but there was no named beneficiary, the money is payable only to the policyowner or the policyowner's estate. Assuming that your wife's mother was the owner (true in the overwhelming majority of individual policies), the policy proceeds are payable to her estate. No one may "claim" the proceeds if there is no named beneficiary.



The estate will be distributed according to her will or state probate laws. Your wife may or may not receive any of the proceeds if there are creditors of the estate who present superior claims. If your wife has siblings, the estate will be divided among all the siblings. Estate proceeds are not subject to federal taxation -- they are an inheritance. The decedent's estate could be subject to estate taxes if its total value exceeds $5,000,000 this year.



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PostPosted: Fri May 20, 2011 3:52 am   Post subject: Life insurance without beneficiary  

My Dad died and had a life insurance policy from his work with no designated beneficiary. He was married to my step Mom at the time of his death, but she died one week later. Both died in the State of California. My step Mom's parents are claiming they should get the life insurance. Who is entitled to the insurance?


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PostPosted: Fri May 20, 2011 4:59 pm   Post subject:   

Quote:
My Dad died and had a life insurance policy from his work with no designated beneficiary.




First of all, please allow me to offer my condolences for the loss of your father.



A life insurance policy provides a benefit [money] to someone when the insured's heart stops beating. Therefore, please understand the most basic element of any life insurance policy is the beneficiary designation. I'm not even sure a policy - any policy - would even be issued without a named beneficiary.



If someone out there knows of a company who will issue a policy without a named beneficiary, please let me know.



Secondly, I would ask that you again allow me to offer my condolences on the loss of your stepmother.



Her parents are claiming they should get a life insurance benefit? Your stepmother obviously wasn't that old.



Quote:
Who is entitled to the insurance?




This is easy. In the state of California, the named beneficiary is entitled to the insurance proceeds. I would suggest you contact your father's place of employment (usually the Human Resources Department) and get some answers about his life insurance policy. In fact, they might even have a copy of it. If not they can certainly direct you to the company that issued the policy. I guarantee you the document exists somewhere.


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PostPosted: Sat May 21, 2011 1:06 am   Post subject:   

1) the original beneficiary could have died first leaving no beneficiary.



2) it is possible for a policy to be issued without a named beneficiary.

A) even without a named beneficiary, there is still a beneficiary.

B) what reason would the insurance company have in terms of caring about this in general?


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PostPosted: Sun May 22, 2011 10:48 pm   Post subject:   

Quote:
1) the original beneficiary could have died first leaving no beneficiary.




Yes, good call - that could be correct. And because only the insured knew the policy even existed, he must have felt he didn't need to mention anything - to anyone -when the primary beneficiary he named on the policy died before him. Maybe he just figured he'd keep paying premiums and let the step mom figure it all out when he died - and then she died a week later and his whole plan fell through.



Quote:
2) it is possible for a policy to be issued without a named beneficiary.




Ok, I'll give you this one too. He must have left the beneficiary designation box blank because he had every intention of leaving the proceeds of his policy to his estate? That must have been what you meant - right?



If he named a trust or any estate planning tool as beneficiary, that still counts as a beneficiary designation.



Quote:
A) even without a named beneficiary, there is still a beneficiary.




The insured's estate?



Quote:
B) what reason would the insurance company have in terms of caring about this in general?




Just a little thing called Contract Law. At some point in the past, the insurance company promised to pay someone when the insured died - and they are legally obligated to do so.


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PostPosted: Mon May 23, 2011 12:58 pm   Post subject:   

It is common for people to forget to update beneficiary designations.



Without a living named beneficiary, the default beneciary would be the owner (or the owner's estate) and not the insured's estate.



You missed the point. The insurance company does need to make a payment, but they don't care to whom the payment is getting paid as long as it is the correct person. If nobody is named, the contract will specify where it gets paid.


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PostPosted: Mon May 23, 2011 4:48 pm   Post subject:   

Quote:
Without a living named beneficiary, the default beneciary would be the owner (or the owner's estate) and not the insured's estate.




Let's assume the policy owner and insured are the same person.



Quote:
You missed the point. The insurance company does need to make a payment, but they don't care to whom the payment is getting paid as long as it is the correct person. If nobody is named, the contract will specify where it gets paid.




Because I've obviously missed the point, thanks so much for bringing me up to speed on this stuff. Let me see if I've got this straight:



The insurance company is bound by contract to make a payment to someone - as long as that is the right person. And the "right person" would be the named beneficiary? And if this named beneficiary predeceases the insured (in this case, we'll assume the owner and insured is the same person) and this person fails to update his beneficiary information which, according to you happens with some regularity, it is the actual contract / life insurance policy that dictates where the benefit is to be paid?


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PostPosted: Mon May 23, 2011 8:44 pm   Post subject:   

Why should we make an assumpion about the owner?



Are you asking questions or are you trying to make a point?


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PostPosted: Mon May 23, 2011 9:00 pm   Post subject:   

In the original post, it was stated:



Quote:
My Dad died and had a life insurance policy from his work with no designated beneficiary.




From an investigative standpoint, the words "from his work" would indicate this was some sort of work-related life insurance policy. If the policy in question was part of an employee benefit package - and that's more-than-likely the case, the insured would have also been the policy owner. I am familiar with the key-employee concept and admit that while the company might have owned the policy, I just doubt this was one of those cases. If it had been, I seriously a beneficiary designation would have been overlooked.



Wouldn't you agree?


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