Is Collecting Life Insurance Before Filing The Will Allowed?
From Our “Ask a Question” Mailbag: Is Life Insurance a Probate Asset?
Most Recently Updated August 9, 2018.
“My father died recently, and I am the executor. I will file his Will next week. But my siblings have already contacted the life insurance company to collect the life insurance. Is life insurance a probate asset or not? Can they receive the life insurance before I file the Will?”
Is Life Insurance a Probate Asset, or Not?
If a life insurance policy names an actual beneficiary, then the proceeds are considered a “non-probate” asset. A non-probate asset passes to the designated beneficiary no matter what the Will says. The Will controls who inherits “probate” assets.
Collecting Life Insurance Before Filing The Will Is Permissible.
The executor’s job is to collect all the probate assets. Typical probate assets include land, automobiles, bank accounts, and businesses. Typically the administrator receives these items. The executor pays the bills and then distributes them to beneficiaries named in the Will. Non-probate assets include IRAs and life insurance. These non-probate assets usually name beneficiaries.
To learn more about the probate process, visit my website.
The Executor Has No Power Over Non-Probate Assets, But May Be Responsible for paying The Resulting Inheritance Or Estate Tax.
Your siblings are free to contact the life insurance company at any time to collect life insurance naming them as beneficiary. Whether you file the Will or not, it does not affect their rights. These non-probate assets are still subject to any applicable Inheritance or Estate taxes.
Further, review the Will to determine who is responsible for taxes. You, as executor, may have to use the probate assets to pay the death taxes due on non-probate assets. The deceased should have made clear in the Will who is writing that check. If you need assistance in interpreting the Will, feel free to contact me.
More Probate Questions?
The life insurance is only part of the overall probate process. By all means, if you wish to learn more, please read my more detailed article, The Probate Process All You Need to Know.
In Conclusion: Is Life Insurance a Probate Asset
I hope that this article was helpful in explaining if Life Insurance is a Probate Asset. Further, I included links to even more detailed information on my website. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!
Let our Probate Lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced Probate Attorneys. By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!
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Tags: Amy Besser, Estate Administration, Estate Tax, Federal Estate Tax, Inheritance Tax, Life Insurance, Probate, Probate Attorney, Probate Lawyer
