Picture this scenario; your dad has already mentioned that everything he has will go to you when he dies. Still, after considering his will, you find out that they should give all of his insured fortunes in a life insurance policy to his ex-wife, whom he had listed as his beneficiary.
In this situation, who do you think would get the money? The life insurance beneficiary vs will battle one that most families find themselves in nowadays, so read on to find out all that you should know about the two.
A man’s will is written to point out how his money and assets would be distributed and sometimes controlled. Nonetheless, life insurance policies have their power, and here are some of their powers;
- Life insurance policies are considered contracts, for instance, the deed of a house and, in particular, one that is yet to be probated.
- A beneficiary’s money is meant to get from a life insurance policy gets disbursed immediately after the policyholder is confirmed dead. It can only be disbursed if the beneficiary listed can provide the certificate of death of the deceased policyholder and proof of who he is. This method is beneficial, especially if the family needs money to fund the funeral and burial of the deceased policyholder.
- Probate fees can reduce the value of an estate, and probate fees are known to last for as long as a year. Furthermore, they can put up certain family assets like the family home for sale if they need some money to offset some bills.
In this war of inheritance, what would be your next line of action? One can challenge wills and life insurance policies. The only way you can challenge a will or life insurance policy successfully is to prove that your dad was taking action under duress or wasn’t sure of his decision.
Life Insurance Beneficiary Vs Will
In cases where a life insurance policy beneficiary is challenged, cases involve undue influence, weakened intellect, or a suspicious circumstance. First, you should know if there is a life insurance policy. You should try to find out who the beneficiary is and if the beneficiary is dead, find out if they named the second beneficiary in the policy.
The insurers should pay the beneficiary that has been named in a life insurance policy. When all the beneficiary’s names in the policy die before the policyholder dies, all the money goes to the policyholder’s estate. This means that if none of the beneficiaries is alive, they will triumph over the life insurance policy.
This is bound to happen if they put the life insurance policy in place years before the death. However, if there was a lapse in the policy because of payments, the insurer isn’t obligated to pay. In addition, life insurance is long-term contracts, and several things are bound to change from the time they put the policy in place. For example, people might get married in some cases, and the husband would name the wife as the beneficiary.
When they divorce, the wife would still get all of the money unless the man makes a change of beneficiary before he dies. It is also possible for the first wife to get a court order from the court to ensure the man keeps her on his policy, which can supersede any change that the man might make.
Being vague when it comes to naming beneficiaries isn’t the right thing to do. Leaving all you have to your son might cause some legal issues, especially if another so comes up and lays a claim on the father’s inheritance.
This might require a DNA test; it is why most lawyers advise that you leave your attorney an in-depth memorandum about your life details such as accounts, properties, insurance policies. Anything else that you own and the basic information of anyone you have listed to inherit them. It is also important that you let your beneficiaries know they would be inheriting your property but make sure you do not leave with them a dollar amount.