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If you have more debts than your estate is worth won't it make more sense to NOT have a will so that your life insurance beneficiary won't have to pay your debts?
Wiki User
∙ 13y ago
In order to satisfy the debts and end the creditors, an estate is the way to go. Debts are one of the primary reasons someone should open an estate. The estate has to pay off the debts. If the estate cannot do so, they distribute as best they can. If the court approves the distribution, the debts are ended.
Wiki User
∙ 13y ago
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Is the beneficiary obligated to pay decease debt?
I'm confused... Your the benficiary of what? Life Insurance or a Will? The deceased left debts...and taxes? If you are the beneficiary of a life insurance policy...the proceeds go to you..in full (after paying back any loans taken against the policy), no matter what. Independent of the "estate" of the deceased. If your a beneficiary as in a Will of the decedent...then his bills of whatever type get paid before whatever your supposed to get is available. (If he owes other people they must get paid. It kind of makes sense that he can't leave you money he doesn't really have). Answer2: No. Any debts are paid out of the estate left by the deceased. If the estate is not large enough to cover the debts it ends there. The beneficiary gets nothing but does not assume the debts.
Can you be executor of estate with no assets in estate?
Yes. This can make sense in order to close out the debts of the deceased and prevent creditors from annoying surviving family members.
what disadvantage of buying insolvent estates?
An insolvent estate is one with no value to it. The debts are greater than the assets. Therefore, it does not make sense to purchase an insolvent estate.
Is it true that in the state of Michigan the person who paid the funeral expenses is entitled to the insurance benefit regardless of who the beneficiary is?
Unlikely. It doesn't make sense. If you pay $10k in funeral expenses and the life insurance is 10 million - what kind of a deal is that? It would certainly be possible that if the insurance is payable to the estate of the deseased that the person who paid the funeral expenses could get the $$$ from there.
Can the life insured himself be the beneficiary in Life Traditional Life Insurance policy?
I don't thin so. It doesn't make any sense.
As executor can you rent out the estate house and use the rent to pay the taxes bills and use the rest as your fee There are four siblings 2 in agreement of the situation?
If the court agrees, yes. It makes sense to use the estate in a way to preserve the property and to liquidate the debts. The other alternative is to sell the house and pay off the debts. Then the balance can be distributed. Consult a probate attorney in your state for specifics and the way to go about it.
Who pays the attorney fees on an estate?
The executor's fee comes out of the general estate funds, not out of the beneficiaries on a pro-rata basis. But in a practical sense, the residuary legatee is the one who pays the fees, just not directly. Example: An estate is worth $100,000. Debts and expenses are $50,000., of which $10,000 are the executor's fees. The will gives the sum of $50,000 to person A and everything else to person B. After payment of the $50,000 in debts and the gift to A of the $50,000., nothing is left. So B, the residuary legatee has effectively paid the executor's fee. In some states beneficiaries have been successful in petitioning the court to spread the fees in a more equitable manner when there are limited funds.
Should children or the surviving spouse be the beneficiary?
This is a good question. The answer depends on what your are making the beneficiary designation for. That is, an estate, trust, life insurance policy, IRA or retirement account, bank account. Also, what is the total amount of your assets, are you in a community property state? Finally, what do you want to accomplish. Also, estate plans and most policies and accounts allow you to divide between several beneficiaries and name successor beneficiaries, who take the asset if the primary beneficiary fails to survive. The most basic answer to the question is then beneficiary should be whoever you wish to receive the property when you die. For most married couples with moderate estates, their estate planning documents, life insurance, etc., will name their surviving spouse as the beneficiary. Where the estate is sizable enough sometimes the couple will establish particular gifts for children. Particularly if there are children of a prior marriage or relationship. For gifts going to minors (under the age of 18), most states have a version of the Unified Transfer to Minors Act. This act (generally) places a minor's property into the hands of a custodian. A court order is required to access (withdraw) the funds in the account. The entire account comes under the minor's control when they reach age 18. (In California, you can delay this to age 21, but you must include the directions in your estate plan.) As an alternative, where the funds are substantial or require significant management, a guardian of the Minor's estate may be required. The custodian or guardian is normally appointed by the court, but you can specify one in your estate plan. To avoid a custodial account or guardianship, or delay distributions beyond age 21 (in California) you will need to establish a trust for your minor child. The good news is that this can be an "empty trust" (holds no assets) until your death. Some assets, as a general rule, should always designate a person as the beneficiary (or beneficiaries). Life insurance and IRA in particular. Life insurance policies are income tax free to the beneficiary (but included in your gross estate for estate tax- more on that in a bit.) So, designating a beneficiary other than your trust or estate makes the most sense. IRAs (Traditional IRAs) have an additional reason to name real people as beneficiaries. You may recall that IRA distributions are taxed as income. When a person, or persons, inherit a IRA account as a designated beneficiary they can: 1) Cash out immediately; 2) Cash out over a five year period; 3) Take the IRA as an "inherited IRA" requiring them to take a required minimum distribution and allowing them to take additional distributions as needed. While the money they receive is still taxed as income, they can stretch the liability over many years- and they can grow the IRA without paying taxes (except on distributions.) Better yet, they can designate their own beneficiaries and continue this cycle for generations. (Until the feds change the rules.) In contrast, if your estate or trust is the beneficiary of a traditional IRA, they must cash out immediately (Trusts and estates cannot "own" and IRA). As trusts and estates pay the some of the highest income tax rates, this usually is not the optimum answer. And, of course, if you name no beneficiary for your life insurance or IRA, the assets are subject to probate which may increase cost of administering your estate. Estate tax planning is less of an issue under the current rules, except for very large estates. The current exclusion amount for 2016 is $5,450,000 (it increases annualy until the feds change the rules.) Also, the surviving spouse gets the benefit of both an unlimited marital deduction (all property going to the survivor escapes estate tax) and portability (where the survivor gets the unused portion of the deceased spouse's gift and estate tax.) Of course, this is for Federal Estate Tax- some states may have an estate tax (based on the amount of the decedent's estate) or an inheritance tax (based on the amount the beneficiaries receive), or both. What this means is that a married couple can effectively shield more than $10,000,000 of property passing to their heirs with a very simple estate plan. For larger estates (or estates anticipated to grow substantially), there are some additional estate planning devises to avoid estate tax. An ILIT (Irrevocable Life Insurance Trust) is one. An ILIT is a trust which owns an insurance policy on your life, and because you do not "own" the trust the policy is not included in your estate for estate tax calculations. But, they are irrevocable, so you can not change your mind latter. And, ILITs have other administrative, cost and tax considerations associated with them, so a careful analysis is required for their optimal use. As you can see, the question of "Who should be the beneficiary?" is a more complicated question than it appears, and the advice of a qualified estate planning attorney is generally worthwhile and recomended.
If you are a married couple living in SC and your spouse dies are you responsible for his debts?
The creditors can come after his estate to pay the bills so in a sense, it does make you responsible since you inherit his estate after his death. * State probate laws determine what assets are available for payment of a deceased's debts. Any property owned by a married couple as Tenancy By The Entirety reverts to the surviving spouse automatically and is not subject to probate procedures nor action by creditors when the deceased spouse was the sole debtor.
What does primary beneficiary mean?
* the recipient of funds or other benefits * benefactive role: the semantic role of the intended recipient who benefits from the happening denoted by the verb in the clause * having or arising from a benefice; "a beneficiary baron" wordnet.princeton.edu/perl/webwn * A beneficiary (also, in trust law, referred to as the cestui que use) in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. ... en.wikipedia.org/wiki/Beneficiary * One who benefits from the distribution, especially of an estate en.wiktionary.org/wiki/beneficiary * An individual, institution, trustee or estate which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust or other contract upon the death of a certain person. www.statefarm.com/learning/life_stages/retire/glossary.asp * The Beneficiary is the person named by the Account Owner in the Account Application (or in a Change of Beneficiary form) who receives the benefit of the Account. www.mnsaves.org/faq/glossary.html * A lender under a note secured by a deed of trust. www.gloriabryant.com/glossary.aspx * the person or legal entity that receives the annuity death benefit upon death of the contract owner or annuitant. annuityspecs.com/Page.aspx * The beneficiary is the person or persons to whom the insurance proceeds are payable when the insured dies. A policy owner may also name a contingent beneficiary to become the beneficiary if all the beneficiary's die while the insured is alive. ... www.ampminsure.org/notepad/terminology.html * The person or persons designated by a policyholder to receive insurance policy proceeds. www.gisbenefits.com/glossary.htm * The person who is to receive the benefits from a trust fund. www.jocobuilder.com/gloss.htm * A person who is eligible to receive benefits from an insurance policy. www.medtronicsofamordanek.com/spineline/hospital/definitions.html * A person designated by a participant or one who, by the terms of the plan, is or becomes eligible for benefits under the plan. www.mgo-inc.com/pendefs.html * The person in whose favor a letter of credit is issued or a draft is drawn. www.usaexportimport.com/glossary.php * The person who, upon the insured's death, has the first right to receive insurance proceeds. www.spectruminsurancegroup.com/glossary_p.php * In the event an employee dies, benefits are paid to the person or persons listed as primary beneficiary(ies). ... www.occc.edu/HumanResources/glossary.html * The beneficiary named as first to receive proceeds or benefits from a policy when they become due. (LI) www.ggil.biz/glossary/p.html * A person or organization designated to receive the funds or other property from a trust, insurance policy, retirement account or other contract. www.schwab-global.com/public/schwab-gcb-en/investing_from_outside_the_us/glossary/glossary_j_r.html * The first person named in the policy as beneficiary. www.lifeinsurancesouthflorida.com/Resources/glossary.html
What does primary beneficiary?
* the recipient of funds or other benefits * benefactive role: the semantic role of the intended recipient who benefits from the happening denoted by the verb in the clause * having or arising from a benefice; "a beneficiary baron" wordnet.princeton.edu/perl/webwn * A beneficiary (also, in trust law, referred to as the cestui que use) in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. ... en.wikipedia.org/wiki/Beneficiary * One who benefits from the distribution, especially of an estate en.wiktionary.org/wiki/beneficiary * An individual, institution, trustee or estate which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust or other contract upon the death of a certain person. www.statefarm.com/learning/life_stages/retire/glossary.asp * The Beneficiary is the person named by the Account Owner in the Account Application (or in a Change of Beneficiary form) who receives the benefit of the Account. www.mnsaves.org/faq/glossary.html * A lender under a note secured by a deed of trust. www.gloriabryant.com/glossary.aspx * the person or legal entity that receives the annuity death benefit upon death of the contract owner or annuitant. annuityspecs.com/Page.aspx * The beneficiary is the person or persons to whom the insurance proceeds are payable when the insured dies. A policy owner may also name a contingent beneficiary to become the beneficiary if all the beneficiary's die while the insured is alive. ... www.ampminsure.org/notepad/terminology.html * The person or persons designated by a policyholder to receive insurance policy proceeds. www.gisbenefits.com/glossary.htm * The person who is to receive the benefits from a trust fund. www.jocobuilder.com/gloss.htm * A person who is eligible to receive benefits from an insurance policy. www.medtronicsofamordanek.com/spineline/hospital/definitions.html * A person designated by a participant or one who, by the terms of the plan, is or becomes eligible for benefits under the plan. www.mgo-inc.com/pendefs.html * The person in whose favor a letter of credit is issued or a draft is drawn. www.usaexportimport.com/glossary.php * The person who, upon the insured's death, has the first right to receive insurance proceeds. www.spectruminsurancegroup.com/glossary_p.php * In the event an employee dies, benefits are paid to the person or persons listed as primary beneficiary(ies). ... www.occc.edu/HumanResources/glossary.html * The beneficiary named as first to receive proceeds or benefits from a policy when they become due. (LI) www.ggil.biz/glossary/p.html * A person or organization designated to receive the funds or other property from a trust, insurance policy, retirement account or other contract. www.schwab-global.com/public/schwab-gcb-en/investing_from_outside_the_us/glossary/glossary_j_r.html * The first person named in the policy as beneficiary. www.lifeinsurancesouthflorida.com/Resources/glossary.html
Your father inlaw has died and left money in his will to other people but there is only engough left to burry him what shall you do?
An estate for your father in law should be opened. After all debts against the estate are settled, then monies can be distributed per the will. I believe burial would be a debt against his estate. Consult an estate attorney. It's not feasible to give away his money while he doesn't even have any to give after he is buried. Common sense should prevail on this one...but seek legal advice from the estate attorney.
