Uncovering a Life Insurance Policy for a Deceased Loved One

September 5, 2024

Losing a loved one is challenging, and managing their financial affairs can add to the burden. Amidst the grief and emotional turmoil, you also need to learn if your deceased parent or spouse had a life insurance policy. Uncovering a life insurance policy for a deceased loved one can provide valuable financial support, settling debts and funeral expenses in this difficult time. While the process can be daunting, a skilled estate planning attorney can help you get started.

A life insurance policy can sometimes go unclaimed, if the insurance company isn’t aware that the policyholder has passed away or can’t find the beneficiaries. This can make the process of claiming insurance more challenging. However, you just need to know where to start looking for the policy.

According to USA Today, the first place to look is through your loved one’s personal files and documents. Some common places where you might find life insurance policy documentation include safe deposit boxes at banks or bank statements that include premium payments. At home, search filing cabinets, desk drawers and incoming or outgoing mail that may include correspondence from the insurance company or a life insurance agent.

If you can’t find the policy documentation, consider reaching out to professionals who may have helped your parents or spouse with their financial or legal matters. These professionals might include financial advisors, estate planners and lawyers. You can also check with insurance companies where your parents had other policies, such as homeowners or auto insurance.

The National Association of Insurance Commissioners (NAIC) offers an online life insurance policy locator service. By submitting a request, you can have participating insurance companies search their records for policies in your parent or spouse’s name. You’ll need to provide some basic information, such as the deceased’s full name, Social Security number, date of birth, date of death and your relationship to them.

If you’re still having trouble locating a policy, private search services are available for a fee. These services will contact insurance companies on your behalf to find out if your loved one had any policies.

Once you locate a policy, the next step is to determine if you’re the beneficiary. You’ll need to contact the life insurance company directly. If you are listed as a beneficiary, the insurer will likely ask for proof of your identity, such as your driver’s license or Social Security number.

When you’re ready to file a claim, you’ll need to provide the insurance company with specific information, including the insured’s full name (including their maiden name, if applicable), the insured’s Social Security number, the insured’s death certificate and proof of your identity and relationship to the policyholder.

Some companies allow you to file claims online, while others may require contacting them directly.

There are two main types of life insurance policies: term life insurance and permanent life insurance. Term life insurance provides coverage for a set period. The beneficiaries receive the death benefit if the policyholder dies within this term. Permanent life insurance offers lifelong coverage if the premiums are paid. This includes whole life insurance, variable life insurance and universal life insurance.

Uncovering a life insurance policy for a deceased loved one can provide financial relief during a difficult time. If you need help navigating this process, the death of a loved one, or want to ensure that your own affairs are in order, consider reaching out to an experienced probate and trust administration attorney. If you would like to learn more about the role of life insurance in estate planning, please visit our previous posts.

Reference: USAToday (Sep. 21, 2023) “How To Find Life Insurance Policies of a Deceased Parent”

The Estate of The Union Season 3|Episode 10

The Estate of The Union Season 3|Episode 8 is out now!

August 19, 2024

The Estate of The Union Season 3|Episode 8 is out now! We all accumulate stuff as we go through life. When someone dies, what to do with all the stuff the deceased owned can be complex and exhausting.

It can also create fights over Who Gets What. In this edition of The Estate of the Union, Brad Wiewel interviews Ann Lumley, the Director of After Life Care at Texas Trust Law. Ann has seen just about everything that can happen with an estate where stuff (otherwise known as heirlooms and collectibles) can be an issue. Ann helps dissect the problems and highlights some strategies to help avoid collisions that often occur.

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 3|Episode 8 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Finding a Missing Heir can be Challenging

August 17, 2023

If someone dies without leaving a will or naming beneficiaries, a probate judge will likely consider the next of kin the heir. Known as intestate succession, this doesn’t prevent family members who aren’t blood relatives from receiving much of the estate. Finding a missing heir can be challenging. That’s why it’s important to locate family members easily after death.

Next Avenue’s recent article, “Where’s Your Heir?” says that in some states, such as Florida, companies can help with an “heir search.” Using the information available to identify the heir, these companies do the due diligence on behalf of the executor or personal representative to locate the heirs and distribute the property or inheritance according to the (deceased benefactor’s) wishes.

Finding someone can require searching a proprietary database or looking at genealogy websites. One company helped find a missing sibling who was homeless and hadn’t been in contact with his family for more than ten years.

In another case, a mother of four children was discovered to be an adoptee only after her death. Further research found that the adoptee’s birth mother had purchased Certificates of Deposit in their names as an inheritance.

To support its networks of genealogical researchers, private investigators, and other agents across the country, these companies charge to find missing heirs.

The heir often pays the fee, ranging from 20% to 30% of the full inheritance amount.

Note that legitimate heir hunters will provide their licenses and other credentials when they first make contact. They won’t ask potential heirs to pay money before they have their inheritance. The arrangement should be a contingency where they get paid once the heir has received their inheritance.

Finding a missing heir can be challenging for an executor. With this in mind, when creating a will, an experienced estate planning attorney will have the creator of the will be as specific as possible in naming heirs or recipients of the estate.

It’s crucial to use the full legal name of each heir. Another best practice is to include the heirs’ dates of birth on documents, especially when heirs have a common name. If you would like to learn more about probate, please visit our previous posts.

Reference: Next Avenue (July 3, 2023) “Where’s Your Heir?”

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Dying Intestate can leave Family financially Crushed

July 11, 2023

Dying intestate can leave your family financially crushed. Dying intestate can mean either that you didn’t have a will or that you had one, but it was held to be unenforceable for some reason.

Intestate inheritance is governed by state law. Every state has its own set of statutes that stipulates who inherits and in what order. These laws are called the laws of succession or the laws of inheritance. The Uniform Probate Code is a template for inheritance laws, and many states have based their own code on the UPC.

Yahoo’s recent article, “What Happens If I Die Without a Valid Will?” explains that the probate courts govern intestate estates. An intestate estate goes through the same three-step process as a testate estate. Attorneys get paid first; debts, taxes, administrative fees and other legal liabilities are paid second, then the heirs receive their portions.

Most state probate codes distribute assets based on the closeness of relation to the deceased. The close relatives inherit before distant relatives in “tiers” of inheritance. Most states’ laws say that intestate succession will proceed in the following order:

Spouse
Legal descendants (i.e., children)
Parents of the decedent
Siblings of the decedent
Grandparents of the decedent
Nieces, nephews, aunts, uncles and first cousins.

As a general rule, any given category of an heir will inherit the entire estate, which is divided into pro-rata shares among all heirs; for example, if an individual died intestate with no spouse, children, or surviving parents, but two sisters and several aunts and uncles. The two sisters would each receive half of the estate, and the aunts and uncles would get nothing.

The big exception to this rule is spouses. In most cases, a spouse will automatically inherit all non-marital assets. However, the Uniform Probate Code does have exceptions for heirs, such as parents and descendants. This is important when it involves children to whom the surviving spouse is not related.

If someone dies intestate and they have no legal living heirs, their assets go to the state. Dying intestate can leave your family financially crushed. The simplest way to avoid this is by working with an estate planning attorney to craft a Will or Trust. If you would like to learn more about drafting a will, please visit our previous posts.

Reference: Yahoo (January 27, 2023) “What Happens If I Die Without a Valid Will?”

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Lack of Will can be Devastating for families

June 6, 2023

According to a recent article, “The Confusing Fallout of Dying Without a Will,” from The Wall Street Journal, despite the consequences for their heirs and loved ones, millions of Americans still don’t have a will. The total wealth of American households has tripled over the past thirty years, according to the Congressional Budget Office. Still, more than half of Americans polled by Gallup said they didn’t have a will in 2021. Another survey showed that one in five Americans with investible assets of $1 million or more don’t have a will. The lack of a will can be devastating for families.

Dying without a will means the laws of your state will determine who gets your assets. In some cases, loved ones could end up with nothing. They could be evicted from the family home and even hit with massive tax bills.

This is especially problematic for unmarried couples. One example—after 18 years of living together, a couple had an appointment with an estate lawyer to create wills. However, the woman died in a horseback riding accident just before the appointment. Therefore, her partner had to get the woman’s sons, who lived overseas, to sign off, so he could be appointed her executor. The couple had agreed between themselves to let him have the home and SUV they’d purchased together. However, state law gave her sons her 50% interest. Therefore, he had to buy out her son’s interest to keep his home and car.

Dying without a will, or “intestate,” means you can’t name an executor to administer your estate, name a guardian for minor children, or distribute the property as you want.

Here’s what you need to know about having—or not having—a will:

State law governs property distribution. In some states, where there is a surviving spouse and children, the surviving spouse gets 100% of the estate, and the children get nothing. The surviving spouse gets 50% in other states, and the children divide the estate balance. For example, in Pennsylvania, if there are no children but there is a surviving parent, the surviving spouse gets the first $30,000, and the balance is split 50/50 with the parent. In Tennessee, a surviving spouse with two or more children receives a third of the estate, with the rest split between the children.

Check on all assets for beneficiary designations. Retirement accounts and life insurance policies typically pass to whoever is listed as the beneficiary. However, if you never named a beneficiary, the state’s laws will determine who receives the asset.

The lack of a will can be devastating for families. Ensure you have a basic will created at the very least. If you don’t have a will and want to be sure a partner gets these assets, you’ll need to speak with an experienced estate planning attorney to explore your options. For example, you might be able to use a transfer on death deed or a payable on death account. However, there may be better ways to accomplish this goal. If you would like to learn more about wills and probate, please visit our previous posts.

Reference: The Wall Street Journal (May 2, 2023) “The Confusing Fallout of Dying Without a Will”

Ways to Minimize Your Probate Estate

September 19, 2022

Having a properly prepared estate plan is especially important if you have minor children who would need a guardian, are part of a blended family, are unmarried in a committed relationship or have complicated family dynamics—especially those with drama. There are ways you can protect your loved ones, and minimize your probate estate, as described in the article “Try these steps to minimize your probate estate” from the Indianapolis Business Journal.

Probate is the process through which debts are paid and assets are divided after a person passes away. There will be probate of an estate whether or not a will and estate plan was done, but with no careful planning, there will be added emotional strain, costs and challenges left to your family.

Dying with no will, known as “intestacy,” means the state’s laws will determine who inherits your possessions subject to probate. Depending on where you live, your spouse could inherit everything, or half of everything, with the rest equally divided among your children. If you have no children and no spouse, your parents may inherit everything. If you have no children, spouse or living parents, the next of kin might be your heir. An estate planning attorney can make sure your will directs the distribution of your property.

Probate is the process giving someone you designate in your will—the executor—the authority to inventory your assets, pay debts and taxes and eventually transfer assets to heirs. In an estate, there are two types of assets—probate and non-probate. Only assets subject to the probate process need go through probate. All other assets pass directly to new owners, without involvement of the court or becoming part of the public record.

Many people embark on estate planning to avoid having their assets pass through probate. This may be because they don’t want anyone to know what they own, they don’t want creditors or estranged family members to know what they own, or they simply want to enhance their privacy. An estate plan is used to take assets out of the estate and place them under ownership to retain privacy.

Some of the ways to remove assets from the probate process are:

Living trusts. Assets are moved into the trust, which means the title of ownership must change. There are pros and cons to using a living trust, which your estate planning attorney can review with you.

Beneficiary designations. Retirement accounts, investment accounts and insurance policies are among the assets with a named beneficiary. These assets can go directly to beneficiaries upon your death. Make sure your named beneficiaries are current.

Payable on Death (POD) or Transferable on Death (TOD) accounts. It sounds like a simple solution to own many accounts and assets jointly. However, it has its own challenges. If you wished any of the assets in a POD or TOD account to go to anyone else but the co-owner, there’s no way to enforce your wishes.

An experienced, local estate planning attorney will be the best resource to minimize your probate estate. If there is no estate plan, an administrator may be appointed by the court and the entire distribution of your assets will be done under court supervision. This takes longer and will include higher court costs. If you are interested in learning more about the probate process, please visit our previous posts.

Reference: Indianapolis Business Journal (Aug. 26,2022) “Try these steps to minimize your probate estate”

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Dying without a Will is costly

June 7, 2022

Dying without a will in place is a costly mistake. Without a valid and legal will, it can open the door to family fighting or significant court costs to settle an estate.

The Seattle Times’s recent article entitled “Do you have a will? Without an estate plan, families can struggle to sort it out” advises you to put your wishes in writing, so your estate is handled responsibly at the end of your life.

It’s the best thing that you can do to help your family and help eliminate fighting in the future.

A will can help with the most routine aspects of settling someone’s affairs or provide additional protection for more rare events.

If a person dies without a will, they are said to have died intestate. When this occurs, the deceased’s estate is handed over to the local probate court to identify creditors, beneficiaries and allocate assets.

Property typically goes to a surviving spouse first, then to any children, then to extended family and descendants, following the state’s probate laws. If no family can be found, property typically reverts to the state.

You can also ask an experienced estate planning attorney about a living trust.

A trust is a legal document that can set out plans for someone while they’re still alive and after death, including instructions for how to divide up all assets, including property, businesses and investments.

While most of the instructions should be covered in the living trust, writing a will can also serve as a back-up document to lay out how property and other assets should be transferred. In addition, wills used in conjunction with a living trust commonly designate that trust as the beneficiary of the will. Hence, such wills are referred to as pour-over wills.

A will that’s entirely in someone’s own handwriting — not anyone else’s — that’s signed and dated may be valid, depending on your state of residence. However, it can be disputed in court if there are questions about its authenticity. People who handwrite their wills risk leaving out or forgetting heirs or assets they want to identify, if it’s not checked over by a professional. Dying without a will in place is a costly mistake that could have significant implications for your love ones. If you would like to learn more about drafting a will or trust, please visit our previous posts.

Reference: Seattle Times (May 16, 2022) “Do you have a will? Without an estate plan, families can struggle to sort it out”

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Options to give Assets to Minor Grandchildren

February 28, 2022

If a married couple is creating its estate plan, then how does the couple leave the estate to non-adult grandchildren? What if something were to happen to them before the grandchildren become adults? Can this couple make sure the minor grandchildren do not get control of any inheritance until they’re adults? There are options to give assets to minor grandchildren.

Nj.com’s recent article entitled “How can I leave my money to my minor grandchildren when I die?” says that one way to solve these issues is to create a testamentary trust to provide for young beneficiaries whether they’re children, grandchildren, step-children, or unrelated beneficiaries. The terms of a testamentary trust are in your will. It is only established and funded after you pass away.

The terms of the trust generally provide instructions to the trustee about the ages at which distributions must be made, if any. These instructions also allow the trustee to make discretionary distributions of income and principal to the beneficiaries.

Beneficiaries do not need to be identified by name or need to be born at the time the will is written. However, they must be able to be identified upon your death. As a result, you can provide a bequest to all of your grandchildren, whether or not they are born yet.

It doesn’t matter where your grandchildren live as far as estate planning is concerned. However, if they live outside the United States and the bequest is considerable, the laws of their home country should be addressed. This is because a big gift may cause adverse tax implications to the recipient.

For children, some states’ laws allow you to add a term in your will that penalizes any interested person — like an heir or beneficiary — for contesting the will.

However, if there’s probable cause initiating a proceeding concerning the estate, then the clause will not be enforced.

When a person names another as primary beneficiary, they should also name one or more contingent beneficiaries, so that if the first person predeceases him or her, they will not have to revise the will.

If you do not designate a contingent beneficiary, and an heir predeceases, the assets pass according to the state’s intestacy statute rather than according to the will. You have options to ensure assets you give to minor grandchildren are honored after you pass. An experienced estate planning attorney will help you draft a testamentary trust that is right for you. If you would like to learn more about testamentary trusts, please visit our previous posts.

Reference: nj.com (Dec. 9, 2021) “How can I leave my money to my minor grandchildren when I die?”

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Understanding the Legal Terms in Estate Planning

February 17, 2022

Having a working understanding of the legal terms used in estate planning is the first step in working successfully with an estate planning attorney, says a recent article, “Learn lingo of estate planning to help ensure best outcome” from The News-Enterprise. Two of those key words:

Principal—the individual on whose behalf documents are prepared, and

Fiduciary—the person who signs some of these documents and who is responsible for making decisions in the best interest of the principal and the estate.

In estate planning and in business, the fiduciary is the person or business who must act responsibly and in good faith towards the person and their property. You’ll see this term in almost every estate planning or financial document.

Within a last will and testament, there are more: beneficiary, conservator, executor, grantor, guardian, testator, and trustee are some of the more commonly used terms for the roles people take.

The testator is the principal, the person who signs the will and on whose behalf the will was drafted.

Beneficiaries are individuals who receive property from the estate after death. Contingent beneficiaries are “back-up” beneficiaries, in case the beneficiaries are unable to receive the inheritance. In most wills, the beneficiaries are listed “or to descendants, per stirpes.” This means if the beneficiary dies before the testator, the beneficiary’s children receive the original beneficiary’s share.

In most cases, specific distributions are made first, where a specific asset or amount of money goes to a specific person. This includes charitable donations. After all specific distributions are made, the rest of the estate, referred to as the “residuary estate,” is distributed. This includes everything else in the probate estate.

The administrator or executor is the fiduciary charged with gathering assets, paying bills and making the distribution to beneficiaries. The executor is the term used when there is a will. If there is no will, the person in the role is referred to as the administrator and may be appointed by the court.

If a beneficiary is unable to take the inheritance because they are a minor or incapacitated, the court will appoint a conservator to act as fiduciary on behalf of the beneficiary.

A guardian is the person who takes care of the beneficiary, or minor children, and is named in the will. If there is no guardian named in the will, or if there is no will, a court will appoint a person to be the guardian. Judges do not always select family members to serve as guardians, so there should always be a secondary guardian, in case the first cannot serve. If the first guardian does not wish to serve or is unable to, naming a secondary guardian is better than a child being sent to foster care.

Finally, the trustee is the person in charge of a trust. The person who creates the trust is the grantor or settlor. It’s important to note the executor has no control or input over the trust. Only the trustee or successor trustee may make distributions and they are the trust’s fiduciary.

Having firm understanding of legal terms will make you feel more comfortable in your estate planning. It will make the process easier and help you understand the different roles and responsibilities involved. If you would like to learn more about estate planning, please visit our previous posts.

Reference: The News-Enterprise (Jan. 18, 2022) “Learn lingo of estate planning to help ensure best outcome”

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Be sure Your Will is Valid

February 1, 2022

A properly created will is used to distribute assets, name the executor of the estate, provide details for the powers you want the executor to have and more, depending on what you want the will to accomplish. Most importantly, you want to be sure your will is valid, as explained in a recent article “Estate Planning: A valid will” from Lake Country News.

There are times when an unhappy heir receives less than expected, or for whatever reason, the heir feels they have been shortchanged. If this results in litigation, the will must be not just be valid, but strong enough to withstand a legal challenge.

A will may only be executed by a person who is of sound mind at the time they sign the will, and who is signing the will without any kind of duress, menace, or undue influence. The law sometimes presumes the signature has been made under duress in certain situations, such as when a paid caregiver is the recipient of an unusually large gift. Incapacity or duress is a common reason for wills to be challenged.

A will may be valid, if it satisfies the estate laws of your state of residence. While there are instances when a holographic will, one that has been handwritten, may be accepted, it is more easily challenged than a will created and executed with an estate planning attorney.

The will must be signed by the person making the will, i.e., the testator, and depending upon the state, must be witnessed by one or two people at the same time. Your estate planning attorney will be familiar with the laws of your state. Those two witnesses must see the testator either signing the will or acknowledging the will in their presence. If you have a will in a state that requires one witness, but move to a state requiring two witnesses, your will may be deemed invalid.

Different states also have different requirements for accepting wills prepared in another state. Some states have reciprocity, whereas as long as the will aligns with the state’s law at the time it was executed, it is acceptable. Others are not so flexible.

As a result of the Covid pandemic, some states now permit witnessing documents to take place remotely, usually through a video platform like Zoom or Facetime. These rules vary from state to state, with some states ending the practice in 2021 and others restarting this method in 2022. Check with your estate planning attorney to learn if a will may be witnessed remotely.

You want to be sure your will is vaild. When the will is filed with the court to begin the probate process, the court will examine the will to be sure it complies with the state’s law. Any assets outside of the will—i.e., trusts—are not subject to probate and are not considered part of the taxable estate. One of the reasons to have trusts is to remove the asset from the estate for tax purposes, but also to keep the asset private. Only the grantor, trustee and estate planning attorney know the trusts exist and what they contain.

Heirs who feel they have been shortchanged may not know about assets in trust, which is likely the reason the grantor had the trusts created in the first place. If you would like to learn more about drafting a will, please visit our previous posts.

Reference: Lake County News (Dec. 31,2021) “Estate Planning: A valid will”

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Category: Intestacy

The Estate of The Union Season 3|Episode 8 is out now!

Finding a Missing Heir can be Challenging

Dying Intestate can leave Family financially Crushed

Lack of Will can be Devastating for families

Ways to Minimize Your Probate Estate

Dying without a Will is costly

Options to give Assets to Minor Grandchildren

Understanding the Legal Terms in Estate Planning

Be sure Your Will is Valid

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