Legal Question in Wills and Trusts in New York
Insurance Funds
I have a life coverage for $100K. If anything happens to me, does it become part of my estate? I have a beneficary on my policy, who is also the executrix in my will.
If I have a debt outstanding at the time of my death, would they be able to take it from my insurance policy?,
3 Answers from Attorneys
Re: Insurance Funds
I AGREE WITH JOHN AND DAVID. HOWEVER, TO BE SAFE, YOU SHOULD NAME A SECONDARY BENEFICIARY SHOULD THE FIRST ONE PREDECEASE YOU. BETTER YET, CREATE A LIVING TRUST AND MAKE THE POLICY BENEFICIARY THE TRUST. THE TRUST DOCUMENT COULD NAME MULTIPLE SUCCESSOR BENEFICIARIES. THEN, IN ALL EVENTS, YOU WOULD HAVE ELIMINATED THE POSSIBILITY THAT THE POLICY PROCEEDS EVER BECOME PART OF YOUR ESTATE.
Re: Insurance Funds
1. No, it is not part of your estate.
2. No, it is not available to pay estate debts.
It goes to the beneficiary outright.
Re: Insurance Funds
If the beneficiary survives you, the proceeds will go to that beneficiary. However, if your beneficiary is not living at the time of your death, the proceeds will go to your estate.
If the proceeds do pass to the beneficiary, he/she will not be required to use the proceeds to pay estate debts.
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