by paula winters » Tue Aug 05, 2008 03:34 am
Two weeks ago my brother in law and sister were killed in a motorcycle accident. With my sister dead, my 17 yr old nephew was left as beneficiary. He turned 18 yrs old two days ago. There is no will that we can find and there is a niece that is over 18. Does the nephew get all that money without having to take care of the estate debts? Is the sister entitled to any of the insurance? Since she sprouted her wings after graduating and moved out the nephew seems to think that EVERYTHING is his and is banning her from the house, the property, the vehicles, and won't let her even see the mail. I have one heck of a mess.
Posted: Thu Aug 07, 2008 08:57 am Post Subject:
Lori,
It's just a story....
But the main points that should be understood by the life insurance buying general public who may read this thread are:
1) Life insurance death benefits are paid directly to the named beneficiaries designated in the policy.
2) Life insurance proceeds are NOT part of the deceased person's probate estate and are NOT distibuted under a last will and testament and are EXEMPT from creditor claims against the deceased person's probate estate.
Below is one of my all time favorite Florida laws:
222.13 Life insurance policies; disposition of proceeds.--
(1) Whenever any person residing in the state shall die leaving insurance on his or her life, the said insurance shall inure exclusively to the benefit of the person for whose use and benefit such insurance is designated in the policy, and the proceeds thereof shall be exempt from the claims of creditors of the insured unless the insurance policy or a valid assignment thereof provides otherwise.
Posted: Thu Aug 07, 2008 10:38 am Post Subject:
Lori,
But it is someone's story... Gary why would you think that? Unless you posted it? Seriously how do you know that this OP is not ligit? In fact I'm quite sure she is because she sent me a note...It's just a story....
But the main points that should be understood by the life insurance buying general public who may read this thread are:
I agree total with that....just thought you were very harsh regarding the 'human' part of it...just my opinion...Posted: Thu Aug 07, 2008 07:42 pm Post Subject:
Lori,
I have sold literally hundreds if not thousands of life insurance policies over the past 23 years.
It would be EXTREMELY unusual for a married couple to name their juvenile son as the ONLY contingent beneficiary and totally skip the older daughter.
I'm sorry, but I'm not buying that one without someone showing me the contract. It would be absurd or there would have to be some very bad circumstances regarding the parent(s) with the daughter.
And IF the son was named as the ONLY contingent beneficiary that's the way the policyOWNER wanted the life insurance proceeds to be distributed.
I'm not being harsh. I'm stating facts.
The life insurance proceeds are none of the "Aunt's" business. It doesn't matter whether the Aunt "thinks" the disposition of those proceeds is right or wrong...it's the way the policyOWNER wanted it. Nor does it matter the 18 year old is ill-equipped to handle a very large sum of money and will more than likely squander that money.
That's the way the policyOWNER wanted it.
The "Estate's" debts are NOT the 18 year olds debts to pay. It doesn't matter whether the Aunt or the daughter "thinks" he should pay them with his life insurance benefit. They ARE NOT his debts.
What right does the Aunt, the Daughter or even the Court or anyone else for that matter have to substitute their vision of what they think is right or wrong for the policyOWNER'S designation?
If Pops named Mom as the Primary Beneficiary and only named the son as the only contingent beneficiary THAT'S THE ORDER IN WHICH DAD WANTED HIS LIFE INSURANCE PROCEEDS TO BE DISTRIBUTED.
The daughter may feel hurt and the Aunt may feel this is not right but that's the way Dad wanted it.
Posted: Thu Aug 07, 2008 10:58 pm Post Subject:
Well if the son is the sole beneficiary I guess technically everything would be his. But, as a brother, you would think that he would be willing to split everything down the middle.
Posted: Fri Aug 08, 2008 03:16 am Post Subject: Just trying to help
OK, I have tried to respond several times but it never post so let me try again. Gary, you are correct, there is a lot behind this story but I was simply just trying to find out what the kids were facing. I have no clue exactly why my brother in law didn't put both of the kids on. They are both true siblings. My sister married brother in law right out of high school and have been married over 20 yrs. He did tend to be a bit harsh to my sister and their daughter. I contributed that to his terrible upbringing but we loved him anyway. With both my brother in law and sister gone I just want both kids to have equal share of the estate which is what I think my sister would want. If the insurance is just his... so be it but I don't fully understand insurance and estates, they were asking questions, and I'm attempting to help. although the nephew is mimicing his dad's attitude. The way I see it is they have lost both parents so they need someone in their corner if possible. I do have one other question only because it doesn't make sense to me. OK, both died but brother in law was pronounced dead immediately, CPR was started on sister and she was transported to hospital where apparently she at some point was pronounced dead. With brother in law pronounced first, wouldn't that leave the benefits to my sister since she was legally still alive? And if so, would that still make son beneficiary or does that change anything? People are telling these kids all kinds of things. I know that they need to procure a lawyer but there is no money until someone gets the insurance or they start selling things.
"It doesn't matter whether the Aunt "thinks" the disposition of those proceeds is right or wrong...it's the way the policyOWNER wanted it. Nor does it matter the 18 year old is ill-equipped to handle a very large sum of money and will more than likely squander that money.
That's the way the policyOWNER wanted it."
Gary, you are correct, it doesn't matter what I want... never did matter. These were questions I threw out for answers in which all of you provided input and answers to. You are barking up the wrong tree if you think I have anything to gain here. My heart has stayed torn since the police called. I then had to go break it to the rest of the family. This was my youngest sister. This is the sister that I basically raised because my mother had to tend to another sister that had major health problems and needed round the clock attention. This is the sister that has worked along side me the last 16 yrs in a family business. Those kids are like my own kids. I hope you NEVER have to feel my pain.
Posted: Fri Aug 08, 2008 05:13 am Post Subject:
Oh Paula! I'm extremely for your loss. You and the kids, all are going through a very hard time for sure. I can clearly understand your anxiousness to secure the interests of the kids.
However, I've to agree (as because it is correct) that both the kids should get the share of their parent's fortune, irrespective of the fact that one may waste it out very soon, if neither of them have their names mentioned to receive particular benefits.
If you are sure that your sister would have wanted both the kids to receive their rightful shares, you should respect her desire.
Regards,
Juanita
Posted: Fri Aug 08, 2008 09:05 am Post Subject:
OK, both died but brother in law was pronounced dead immediately, CPR was started on sister and she was transported to hospital where apparently she at some point was pronounced dead. With brother in law pronounced first, wouldn't that leave the benefits to my sister since she was legally still alive? And if so, would that still make son beneficiary or does that change anything?
Now that's a good question and it depends whether or not there is a common disaster clause in the policy or in state law.
A common disaster clause simply states the beneficairy must survive the Insured by a certain period of time say 30 days otherwise that beneficary is presumed to have predeceased the insured.
Most states have adopted the Uniform Simultaneous Death Act. This law would dictate the order of death when parents die together. But the law is used only when the spouses' Wills say nothing about who survived whom - or if there are no Wills at all. Each spouse would be treated by the Simultaneous Death Act as though he/she were the survivor. With the other spouse presumed to be gone already, nothing would go from one dead parent to another. This is the same outcome as achieved with the language used in most simple Wills.
If there is no Will, property is distributed according to the state law of intestacy. The Uniform Act does not specify who gets what. It pertains to the order of death only. Once that is determined, state law or the Will takes over to control the actual distribution of property.
The Uniform Simultaneous Death Act provides that if an insured person under a life policy and a beneficiary die at once, the insured will be presumed to have survived, unless otherwise provided. In that case, the policy proceeds would go to the alternate beneficiary.
Posted: Fri Aug 08, 2008 11:05 am Post Subject:
Paula, the way I understand it, the son may (most likely) get all the life insurance that he is beneficiary to. However the daughter is still entitled to half the estate....whatever that may be...certainly an attorney needs to be hired for her if the boy isn't going to 'play fair' (IMO)...
I can't tell you how sorry I am, I went thru a similar situation with one of my little brothers....(his kids though were minors)....You and your family are in my prayers.
Posted: Fri Aug 08, 2008 02:56 pm Post Subject:
In the spirit of argument and not to be argumentative this thread is a classic example of how little knowledge the general public has regarding what happens when people die.
I'm going to respond to some of the misconceptions posted on this thread.
I'm NOT being harsh or unsympathetic.
The question you have to ask yourselves is.....
Do you want emotional hyperbole or do you want exactly correct information?
Although, I'm going to copy and paste what others have written I'm NOT personally attacking YOU. These comments are typical MISCONCEPTIONS.
TheInsuranceFiles wrote:
Well if the son is the sole beneficiary I guess technically everything would be his. But, as a brother, you would think that he would be willing to split everything down the middle
.No, not "technically." LEGALLY the death benefit is his and his ALONE by contract beneficairy designation.
"willing to split everything down the middle"??? The policyOWNER designated in HIS life policy who he wanted to receive the benefit of his life insurance and he purposefully, for whatever reason, EXCLUDED naming the older daughter.
The son is under no legal obligation whatsoever to split the money with his sister. That would also cause gift tax implications that I'm not going to get into.
Juanita wrote:
If you are sure that your sister would have wanted both the kids to receive their rightful shares, you should respect her desire.
Forgive me for being so blunt. These are adult children not minor children.
The sister has absolutely NOTHING to do with the administration of the parents estate unless a probate court judge appoints her as the executrix.
The life insurance isn't about what the sister thinks the other sister would have wanted regarding the disposition of the funds from another person's life insurance policy. The policyOWNER controls the beneficiary designation. Not their spouse, brother, sister, daughter, son, mother, father, sister-in-law, brother-in-law, mother-in-law, father-in-law, grandma, grandpa or anyone else.
Lori wrote:
an attorney needs to be hired for her if the boy isn't going to 'play fair'
Play fair with what? The boy's father wanted him to have his life insurance benefit. The daughter's father purposefully EXCLUDED her for reasons we'll never know but I'm quite confident he knew he had a daughter and didn't list her as a beneficiary.
No one needs to worry about anyone playing fair regarding the rest of the estate that is subject to the probate court system. The attorneys will make sure every "I" is dotted and every "T" is crossed which will result in a needless estate shrinkage charge of 3% to 8% of the inventory value of the probate estate.
Posted: Fri Aug 08, 2008 03:54 pm Post Subject: Thank you
Ok, I think I have a pretty fair understanding. I stood back and let the kids make the arrangements and watching them fight this out themselves since they are both adults. I just hope that older sister doesn't decide to send younger brother to jail the next time he hits and drags her off the property. As I said, you all have given me some great input and I truly appreciate it. I have talked to my side of the family and we are going to put up the money to see if we can get a lawyer to explain all of this since my nephew wants to take things in his own hands as far as the estate is concern. Yes, I understand that the insurance has no bearing on the estate. This is wishing everyone a GREAT day!! PJW
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