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Does the beneficiary of the life insurance policy have to turn over funds to the estate to pay debt?
Wiki User
∙ 15y ago
I am not an expert but have been involved in my dad's estate. If you are a listed beneficiary on the life insurance policy, it is your money. Unless you are the spouse.
Debt does not have to be paid by the beneficiaries.
My dad's left over $30,000 in debt. He had a $30,000 life insurance policy that had named beneficiaries. We got the insurance policy and did not have to pay for the debt.
Check your state's policy. Go to a free law clinic and verify this info.
Good Luck!
Wiki User
∙ 15y ago
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Does one pay income taxes on life insurance inherited from sister?
If you are the named beneficiary of your sisters life insurance policy then there is no tax. If her policy however paid into her estate and you inherited the funds, then it would be taxable.
Do beneficiary's of a life insurance policy get to keep those funds?
YES.
When proceeds of a life insurance policy are paid into the estate of the insured?
I have written many policies where the beneficiary is listed as the "Estate of Insured". This is a common method of insurance planning but the client needs to have a will in order to direct where the funds are to go. Also "Trusts" are often funded with life insurance proceeds as methods of estate planning. An insurer may also pay proceeds to the estate of an insured if the named beneficiary dies before the insured and the insured does not name a secondary ("contingent") beneficiary. One of the big problems with proceeds being paid to the insured's estate is that, depending upon the amount of the insurance proceeds when added to other estate assets, is that the total may trigger an estate tax liability when one would not otherwise exist.
Does a secondary beneficiary only receive funds from a life insurance policy if the primary beneficiary has already passed?
Yes. A secondary beneficiary only becomes beneficiary if the primary beneficiary dies before the insured. Say the insured and primary beneficiary are involved in a fatal auto accident but the insured dies an hour before the primary beneficiary. The insurance proceeds would not go to the secondary beneficiary but to the estate of the primary beneficiary. If the primary beneficiary dies an hour before the insured then the secondary beneficiary receives the proceeds. If an insured wants both to receive monies they can name more than one person as primary beneficiary and in what percentage for each person. They could also leave it to their estate and handle distribution by a will.
Does the beneficiary of a life insurance policy have to pay for the deceased funeral cost or should the estate pay for it?
The beneficiary of a life insurance policy is not responsible for paying for the deceased's funeral cost using the money from the proceeds of the life insurance policy. The estate of the deceased is responsible for paying for the funeral cost from the proceeds of the estate.
Is the beneficiary of a life insurance policy responsible for bills of the deceased?
An individual buys life insurance for a variety of reasons, some of which may include Love, Character (to provide financial security for others), or because of a court order (such as for divorce) requires it. There are other reasons, too. Unless the beneficiary of the life insurance policy has agreed to answer for the debts of the deceased, he/she is not ordinarily responsible for them. The Statute of Frauds of the US jurisdiction in which he/she/the deceased resides will probably address this issue. Under the Statute of Frauds, an agreement to pay the debt of another usually has to be in writing to be enforceable. If the beneficiary of the life insurance policy is also the executor/administrator of the estate, he/she has to follow the statutory law regarding notice to creditors (usually by publication) of the insured's death, and see to it that claims timely filed are paid from available estate assets. If the life insurance proceeds are payable to the estate, those proceeds would generally become an estate asset. However, as your question is stated, the named beneficiary is someone other than the estate. Therefore, based on the scope of the question, the beneficiary is entitled to the funds and is not responsible for the debts of the deceased. Regardless of one's view on the moral or ethical issues of the matter, the beneficiary has no legal obligation to use the funds to pay the debts of the deceased. This is a general response to your question and is based only on the information given. No attorney-client relationship is created or intended.
Why have a life insurance policy to the estate?
One reason is that the decedent wanted to have the funds available to pay debts of the estate and to have the remaining proceeds shared equally by the heirs.
What happens to life insurance benefits if beneficiary refuses payments?
Most life insurance policies have a primary and secondary beneficiary. If the primary signs away all their present and future rights to the benefits then it will be left to the secondary beneficiary. If there is no secondary beneficiary or the secondary beneficiary is deceased the money would be left to the estate of the insured and subject to probate. This would place the funds subject to estate taxes if the estate is large enough. As a matter of full disclosure, I own and operate a small Independent Insurance Agency for the past 22 years and worked as an agent for direct writers for 3 years prior to that.
The administrator made you put your own beneficiary funds into the estate account advising it was required. Can you sue her for fraud or petition the court to remove her?
You haven't explained what the "beneficiary funds" consisted of or where you got them. If the funds came from a joint account with you and the decedent or from a "payable on death" account with you as the beneficiary the funds are not part of the probate estate. You should visit the court where the probate was filed immediately if you think you are a victim of fraud by the administrator. You can file a motion to have your question answered after a review by the court. If the administrator is mishandling the estate she can be removed and replaced by the court.You haven't explained what the "beneficiary funds" consisted of or where you got them. If the funds came from a joint account with you and the decedent or from a "payable on death" account with you as the beneficiary the funds are not part of the probate estate. You should visit the court where the probate was filed immediately if you think you are a victim of fraud by the administrator. You can file a motion to have your question answered after a review by the court. If the administrator is mishandling the estate she can be removed and replaced by the court.You haven't explained what the "beneficiary funds" consisted of or where you got them. If the funds came from a joint account with you and the decedent or from a "payable on death" account with you as the beneficiary the funds are not part of the probate estate. You should visit the court where the probate was filed immediately if you think you are a victim of fraud by the administrator. You can file a motion to have your question answered after a review by the court. If the administrator is mishandling the estate she can be removed and replaced by the court.You haven't explained what the "beneficiary funds" consisted of or where you got them. If the funds came from a joint account with you and the decedent or from a "payable on death" account with you as the beneficiary the funds are not part of the probate estate. You should visit the court where the probate was filed immediately if you think you are a victim of fraud by the administrator. You can file a motion to have your question answered after a review by the court. If the administrator is mishandling the estate she can be removed and replaced by the court.
Are children in the state of Maryland responsible to pay a debt to a nursing care facility of a parent who is deceased and has no estate but did leave beneficiary funds in retirement system?
If funds are noy part of the estate then no
Which kind of life insurance policy protects a company from loss caused by the death of a valuable employee?
Key Man life insurance could be either on a term or permanent life plan, where the beneficiary is the employer. The funds can be used by the beneficiary company to hire and train a replacement for the key person employee.
Can a relative get funds from a deceased relative if they have a death certificate?
No, the relative would need to be included in the will, be named as a beneficiary or power of attorney, or be owed money by the estate. The executor of the estate will be in touch if any funds are available.
