by cindy6561438 » Thu Jun 03, 2010 12:38 am
Hello my question is my x husband passed away and he had an insurance policy listing me the mother of his children beneficiary.. i called the agent and he said because we were divorced and it was not stated in our divorce decree .. this is nothing at all mentioned about getting or not getting the money in the decree so they put the money in the estate and my 2 daughters now have to pay tax on this money... this is in the state of pa .. my agent said he was shocked in this matter but is also a friend of my x husbands family.. do you advise that i get an attorney or does this stand? thank you
Posted: Thu Jun 03, 2010 12:10 pm Post Subject:
Was this a life policy that your ex=husband had from his employer (group policy) or a private policy? Have you talked to the actual company (not agent)? Have you seen the policy, and the beneficary statement?
Posted: Thu Jun 03, 2010 06:23 pm Post Subject:
thank you for responding i talked to the insurance company and they are telling me that it is a state law of pa that a former spouse cannot be paid.. this was a private insurance policy which i think is more of a contract not part of an estate please advise what to do
Posted: Thu Jun 03, 2010 10:47 pm Post Subject:
If it now goes to his estate, and your children are part of his estate, then what is the problem? They will ultimately end up with some of the money right?
Posted: Fri Jun 04, 2010 10:18 am Post Subject:
they put the money in the estate and my 2 daughters now have to pay tax on this money
WHOA! Nellie!
1) Your daughters are not going to pay tax on the money. This is the PERFECT YEAR for people to die. There is an "unlimited exemption" from federal estate tax in 2010. And even if there was estate tax due, your daughters would not be the ones paying the tax. It would be paid by the trustee out of estate assets. The trustee would work to protect the life insurance proceeds for heirs, but . . .
They will ultimately end up with some of the money right?
2) Without knowing more about the ex-husband's affairs, no one can make that statement with any certainty. If your husband died intestate -- without a will -- the estate will be probated by the court, and claims of employees, the government, and unsecured creditors are all ahead of the heirs in line to collect money from the estate. Spouse or ex-spouse, monetary assets in the estate normally pass to heirs "per stirpes" -- by blood, not by marriage. So in that circumstance, the children have a claim where the spouse/ex-spouse does not.
3) Knowing that your husband could have renamed you as the beneficiary, but apparently did not, has probably left you so mad you'd kill him a second time if you could.
There needs to be a national initiative to undo this injustice done to spouses in the handful of states that instantly cut off the ex-spouse (90%+ women) from life insurance benefits. Any guesses as to the gender of the legislators who originally passed the laws?
Posted: Mon Jun 07, 2010 11:18 am Post Subject:
OP started another thread with the following, I'm adding it here (same topic) and deleting that thread to hopefully stop any confusion before it starts :wink:
if someone knows the answer to this let me know. the benefit went to the estate... my daughters are minors so they will have to pay taxes on this please let me know if anyone has the answer to this this is for the state of pennsylvania the insurance company is telling me because i am divorced i was listed beneficiary that the money will not be paid to an ex spouse so they put it in the estate my daughters are 16 and 15 so now they have to pay taxes from the estate i never heard of such a thing
Posted: Mon Jun 07, 2010 11:45 pm Post Subject: insurance
3) Knowing that your husband could have renamed you as the beneficiary, but apparently did not, has probably left you so mad you'd kill him a second time if you could.
That is super funny...but, probably true!! However....I've known this to happen BOTH ways. I wouldn't be concerned for yourself, OP. At least you know your children are being taken care of.Posted: Tue Jun 08, 2010 04:44 am Post Subject:
Again, I'm not aware of any laws that would require your daughters to pay taxes in this matter. As I stated above, that is the responsibility of the trustee/administrator of the estate. Pennsylvania (not my state of expertise) may or may not impose taxes on "wealth transfer", but most states do not. Even so, those taxes are normally the responsibility of the payer not the receiver.
Your daughters' tax liabilities would only stem from INTEREST paid to them from/with the death benefit payment.
At least you know your children are being taken care of.
Can't rush to make that pronouncement, either. If the money goes to the estate, it is generally available first for the claims of general (unsecured) creditors of the decedent. By the time the government gets through with any past due taxes, penalties, and fees, or other creditors have taken their share, the children might not end up with enough between them to buy something fattening at Starbucks. Administrators/lawyers do their best to avoid that, but the law is the law and claims are claims. If the judge believes that a debt is owed, it comes ahead of holding anything in trust for the minor children.
In a worst case scenario, the OP might have a claim against an agent's E&O policy for his/her failure to communicate the details of a policy loan to the client.
Posted: Tue Jun 08, 2010 02:04 pm Post Subject: insurance
Well........I guess I didn't think of it that way. True...all of the debt does need to be taken care of first. Hopefully the debt doesn't 'outweigh' the Insurance money. :(
Posted: Tue Jun 08, 2010 05:19 pm Post Subject:
buuuuuuuuuuuuuuut, if Dad would've named a beneficary, (ex-wife, kids, anybody), then that money (life ins proceeds) would've been safe from the creditors.
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