by Guest » Sat Dec 06, 2008 03:25 pm
My boyfriend's father died in August. His divorce was finalized from his ex-wife in April. Apparently, he never changed her as the beneficiary on his life insurance policy. My boyfriend and the siblings really didn't care, because they didn't have the money to begin with-so what would it matter if they didn't have it now.....however the ex-wife agreed to split the insurance money 5 ways--believing it was only fair and she had a decent relationship with all the kids/grandkids. My boyfriend and his siblings had a letter drafted by their lawyer stating that the ex-wife agrees to split the life insurance money and she signed it. It was sort of her suggestion. After all, their dad divorced her (and on a side note, his reasons for divorcing her had something to do with him pulling his retirement out early upon her suggestion so that she could place some money in an acct that would draw interest and some in the bank acct to pay bills with, only to find out that the money disappeared and she began using his credit card to pay for bills, subsequently causing my boyfriends dad to file for bankruptcy). My boyfriend got a letter in the mail yesterday from his step-mom stating she's going to be keeping all the insurance money basically because she feels entitled to it. She rattled off a list of things she has done that are only simply things a nice person would do without payment. (claims she paid his cell phone bill for a year, a gas bill in 2/08, their joint tax return in 2007, and has been feeding the cats since his death and mailing his mail to my boyfriend's sister. It's so ridiculous....however, my question is this.
Can she get away with this if she signed a notarized document stating she agreed to split the insurance money? After all, they were divorced and it was more than likely an oversight on his part. Also, would something like this be suitable for civil court and how long should it take???
Thanks all.
Can she get away with this if she signed a notarized document stating she agreed to split the insurance money? After all, they were divorced and it was more than likely an oversight on his part. Also, would something like this be suitable for civil court and how long should it take???
Thanks all.
Posted: Wed Oct 13, 2010 08:59 pm Post Subject: Funeral Expenses paid with life insurance
my daughter's father died and she was in Iraq at the time she came home for the funeral and her father's father(grandfather) had her dad take my daughter's name off the life insurance and 401 k plan because he felt she would die over there and her father did just that changed his beneficiary to his father. When her father died her grandfather said he would pay for the funeral with the life insurance policy, now that my daughter had to get an attorney for the estate (only child) and now that the estate is finalized the lawyer wants to reimburse her grandfather the money for the funeral expenses even though he had agreed to pay for it and did with the life insurance policy, so now she has to come up with the money to pay for the funeral expenses from the estate since she is executor of the estate, which doesn't seem fair at all since it was already paid for out of the life insurance policy which if my daughter's name would have been beneficiary she would have paid for the funeral with the life insurance policy. Does she have to pay the grandfather for the funeral expenses already paid for out of the estate?
Posted: Thu Oct 14, 2010 06:21 am Post Subject:
The nerve of some folks. That's why children are supposed to bury parents, not the other way around.
Funeral expenses not prepaid by the decedent are properly the expense of the estate. Normally, when it is available, someone uses the life insurance proceeds to pay for it, and that's that. If granddad is such a cheap SOB that he filed a claim against the estate after using life insurance proceeds to pay the cost, and not money out of his own pocket in the absence of insurance, well so be it. He is lawfully entitled to do that.
And the court is pretty much obligated to award it. But as executor of the estate, your daughter can deny the claim and force Granddad to argue his claim before the judge. That should be pretty embarrassing on its own. He might just drop his claim as a result.
Regardless, no more Christmas presents, birthday presents, or invitations to Thanksgiving or Easter dinner unless he pays for the gifts or the meals. Be sure to charge full retail price, plus tax! He has the money to pay for it.
Posted: Thu Oct 21, 2010 01:48 pm Post Subject: Beneficiary
I am sole heir of my Uncle's estate, per his will. He changed his life insurance in 1999 naming me as the beneficiary. How do I go about claiming this life insurance? Who do I contact and do I have to include the will in claiming the money? Thank you for your help.
Posted: Thu Oct 21, 2010 07:32 pm Post Subject:
If you have the name of the insurance company and the policy number, all you need to do is contact them for the claim form, fill it out, sign it, and submit it with a certified copy of the death certificate. You'll have your check in a week or two. No need to provide a copy of the will (it's meaningless to the insurance company).
Posted: Thu Feb 10, 2011 07:50 pm Post Subject: Life Insurance Beneficiary
I want my 4 yr old granddaughter to be the Beneficiary of my Life Insurance and 401k. What can i do so that my daughter and her boyfriend cant get their hands on the money?? I was told my daughter would get the money because she is her guardian..& my granddaughter is not 18. Thanks for ur help.
Posted: Fri Feb 11, 2011 12:57 am Post Subject:
You would probably want to consult an ESTATE PLANNING attorney and discuss setting up an IRREVOCABLE LIFE INSURANCE TRUST for the life insurance proceeds.
As for the 401(k), if you are married, you will have to get your spouse to sign-off as beneficiary in order to name your granddaughter as the new beneficiary. I am not certain that you can designate a trust as the beneficiary of your 401(k), but because your granddaughter is a minor, the money cannot be paid directly to her, and would be placed into some form of trustee account for her benefit, normally supervised by her guardian. The estate planning attorney can help you prevent that from happening either with a testamentary trust to receive the 401(k) proceeds or through a different mechanism.
Be sure you deal with an attorney who is CERTIFIED as an estate planning specialist, not just someone whose advertisement says Wills & Trusts.
In the meantime, you should designate your granddaughter as your life insurance beneficiary. You can instruct the insurance company to hold all the proceeds until she turns age 18. They will pay the proceeds plus interest. If you later set up a trust for her, then the beneficiary may be changed to the trust. That's no problem. But it's always best to have the beneficiary clearly stated in writing with the insurance company to prevent any problems or challenges.
Call the insurance company for instructions on how to change your beneficiary designation. Do that ASAP!!
Posted: Fri Feb 11, 2011 09:34 pm Post Subject:
You would probably want to consult an ESTATE PLANNING attorney and discuss setting up an IRREVOCABLE LIFE INSURANCE TRUST for the life insurance proceeds
Wow! We've got a great response and an idiotic response all in one.
La2592, you absolutely need to go see an estate planning attorney.
There is zero reason to set up an irrevocable life insurance trust. An ILIT is needed when it makes sense for a trust to own the coverage. There is absolutely no reason for a trust to own this policy. For the cost involved with setting up the ILIT and the annual Crummey letters, etc., she could probably buy a couple hundred thousand of extra term insurance.
A trust is needed as beneficiary, but not as the owner. When this is done, it is not an ILIT.
La2592, the guardian for your daughter and the one who controls the money doesn't need to be the same person. The attorney will set it up so that the money goes into a trust and a trust worthy person can be the trustee.
Posted: Sat Feb 12, 2011 03:25 am Post Subject:
There is zero reason to set up an irrevocable life insurance trust.
Really? How can YOU say that? Neither you nor I know what the OP's situation is. All I said was "discuss" setting up an ILIT. There is absolutely nothing wrong with that advice . . . it is FAR from idiotic.
The reason to set up an ILIT is to remove the value of the insurance proceeds from the owner's estate, and exempt them from ESTATE TAXES. Simply putting the insurance in a trust with the trust as owner does not accomplish that.
In case you hadn't heard, ESTATE TAXES are back. If Grandma has more than $5,000,000 worth of taxable estate, the life insurance proceeds will be included in that liability unless they are properly removed from her estate. An ILIT is one method of doing that and it escapes the 60-month lookback for both Medicaid and estate taxes. A common trust will not escape the lookback, even if made the owner. Ownership must be irrevocable to do so.
But an estate planning attorney would DISCUSS all of that and more, and if an ILIT was in the prescription it would be part of the discussion. If not, an alternative would be on the table. One way or another, the money needs to be in a trust, preferably before Grandma dies. On that, we probably agree, no questions asked. And Grandma will need a will, perhaps, to direct other aspects of her postmortem affairs as necessary.
But you're also right, the trustee and the child's guardian do not have to be the same person. However, left up to family/probate court to decide, they probably would be. So Grandma would be wise to consult the attorney ASAP and get the ball rolling in whatever direction the attorney believes is most appropriate for her situation.
Posted: Sat Feb 12, 2011 03:33 am Post Subject:
she could probably buy a couple hundred thousand of extra term insurance.
You don't know that either (and neither do I). Depending on Grandma's age and health status, she might not be able to get $1 of term life.
Or she might be young and healthy enough to get a 10- or 20-year preferred policy.
Posted: Sat Feb 12, 2011 12:38 pm Post Subject:
I said, "probably". Of course, I don't know if she is insurable.
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