Legal Question in Wills and Trusts in New York

Re: Does your life insurance have to be declared in your will?

Life insurance is property with some unique characteristics. The life insurance policy should designate the benficiary to be paid on the death of the insured.

If the owner of the policy is not the insured (and this can happen) then the owner of the policy should designate in his or her Will who will own the policy on the death of the owner.

If the policy does not designate a beneficiary or the desiganted benficiaries are dead, then the proceeds of the policy will be paid to the estate of the insured.

In direct response to your question, if the beneficiary designations in the life insurance policy are properly prepared the Will need not mention the life insurance policy. As I mentioned, in some cases it is necessary to mention the life insurance policy in the Will

Re: Does your life insurance have to be declared in your will?

Usually, your life insurance does not pass according to the terms of your will. In the usual situation, you have named a beneficiary on the policy and that beneficiary designation determines who gets the proceeds. If you do not have a living named beneficiary on the policy, then your will will direct what happens to those proceeds.

Meg Rudansky

(631) 725-4788

Re: Does your life insurance have to be declared in your will?

No. If you named a beneficiary for the insurance policy, then the proceeds will not belong to your estate. Therefore, do not include them in your will.

You should speak to an attorney about what to include in your will so that your wishes are carried out.

Daniel Clement

Re: Does your life insurance have to be declared in your will?

As a general rule, if you have named a beneficiary or an alternate beneficiary, the proceeds of the policy will pass outside the will. If no beneficiary is named the proceeds will pass through your estate under the will.

This does not mean that the proceeds of the policy will not be taxed in your estate. If you own an insurance policy at the time of your death, the face amount of the policy will be included in your estate for estate tax purposes. If your spouse is the beneficiary, there may be a marital deduction, which will remove some or all of the tax. If someone other than a spouse is the beneficiary, the face amount of the policy will be included in your gross estate and, if you exceed the minimum thresholds, will be taxed.

In most cases the tax can be avoided by means of an insurance trust.

Keven Danow