For Those Who Know About Life Insurance Payout....

[Hisgirl]

...I have a question.

As a follow-up to my previous question about the bank implying I would need letters of testamentary to reveive a POD/TOD account. (the only assets they had)

My parents each had some life insurance. Not much, enough to pay for a funeral and some change.

When my Daddy passed, mama was in the process of passing, They died on the same day.

They each had back-up beneficiaries on their insurance policies.

So when Mama passed, Daddy was gone a few hours earlier.

When Daddy passed, Mama had a few hours to live, then passed.

So when they pay Daddy's policy, will it be to Mama's 'Estate' and I'll be having to file that will after all, and set up an estate bank account? How then is that bank account distributed? Through probate and their will (which they had)? OR...do the back up beneficiaries (my sister and me) come into play?

 

[QueenIsabella]

I believe Dad's estate pays to Mom (or her estate, in this case). Then Mom's insurance would go to the back-up beneficiaries, since your dad had already predeceased her.

You have my sympathies--this time must be so difficult for you, losing both parents and having to go through all the estate stuff. It's a lot. Please take care of yourself.

That said, there are worse things than your parents passing peacefully, within hours of each other. Sucks for the remaining family, for sure, but how (comparatively) nice for them.

 

[Hisgirl]

Thank you. Yes, it WAS bad, but at the same time, a beautiful love story. I'm a financial counselor but all this I've encountered, we sure weren't taught. I'm happy to learn to help others. I was certainly trying to avoid filing their wills since they only had TOD/POD assets but the insurance payouts, yes, that got a bit sticky.

 

[tvguy]

It depends on your state and how your parents estates were set up. In most states, a properly set up estate does not need an estate bank account or probate. That is why estate planning is so important, to avoid probate.

 

[Hisgirl]

It depends on your state and how your parents estates were set up. In most states, a properly set up estate does not need an estate bank account or probate. That is why estate planning is so important, to avoid probate.

They had attorney crafted wils and their only assets were POD/TOD and all insurance policies had back up beneficiaries. No one planned on same-day deaths, which apparently can toss a wrench in.

 

[Praying Colonel]

Many states have enacted a version of a law called the Uniform Simultaneous Death Act that essentially says someone must survive the decedent by 120 hours in order to inherit.

https://www.uniformlaws.org/committ...neous Death Act,into the Uniform Probate Code.

However, life insurance usually isn't a probate asset where state probate laws apply. I recommend checking with the insurer to see if it has internal rules for this situation.

 

[Hisgirl]

Yes, good idea. I did call the three different insurances and they have started their own research and one sent some papers, but of course everything hinges on the death cert. I was really hoping to avoid probate

 

[barkley]

life insurance is generally outside the probate process and even if it falls under the uniform simultaneous death act in your state it should not be a horrific process b/c that act tends to deal with survivorship of days vs. hours. a friend had to deal with this when her grandfather passed at a nursing home while she was visiting. she left the home to deliver the news to her ailing mom only to find that mom had passed at some point the same day. she ended up dealing with everything and thankfully it was an easy process b/c grandpa had a well written out/probate proof estate plan while mom did not. all the financial institutions and life insurance carriers accepted with the death certificates that mom was ineligible as a beneficiary so it all passed to grandpa's subsequent named beneficiaries.

my sympathies for your losses.

 

[DLgal]

Yes, good idea. I did call the three different insurances and they have started their own research and one sent some papers, but of course everything hinges on the death cert. I was really hoping to avoid probate

Pretty sure Life Insurance is not subject to probate. They will payout to the beneficiaries as designated, based on who is still alive when the claim is filed. So, your parents life insurance policies would see that each of them is no longer alive and will pay out to the next in line beneficiary, as long as one was designated. If there is not a secondary or tertiary beneficiary named, the life insurance company will follow the rules in your state for how to pay out the policy (it typically goes: Spouse, natural born children in equal portions, siblings in equal portions).