Life Insurance Beneficiary
Client has a life insurance policy with his three children as equal beneficiaries. Two of the three have children. Client is under the impression (from his attorney) that since his will states that any deceased child’s share (of his estate, I’m assuming) would go to their children, he’s OK. But it seems to me that would not be the case unless the Life policy paid out to his estate via the will first, and then distributed accordingly. Further, if the estate wasn’t the beneficiary (and I don’t believe it should be) his grandchildren could possibly be inadvertantly disinherited without a per stirpes added for each child. Am I correct or should I find another career? Please help… and thanks in advance!
Permalink Submitted by Bruce Steiner on Fri, 2010-01-29 04:38
What does the beneficiary form say happens if a child predeceases the insured?
If the beneficiary form is silent, what does the policy say?
If you’re not sure what would happen, why not fill out another beneficiary designation form that says what you want it to say?
Permalink Submitted by Al Fry on Fri, 2010-01-29 05:00
Any policy I have seen is per capita, unless designated per stirpes in the contract or by State law. The will does not control the Bene of life insurance, unless payable to the estate, as Bruce said. If he wants per stirpes, he should so designate on a bene change form.
Permalink Submitted by Bruce Steiner on Fri, 2010-01-29 14:35
I would think most people would prefer per stirpes (the share of a deceased primary beneficiary goes to that person’s issue) rather than per capita (the share of a deceased primary beneficiary goes to the other primary beneficiaries), at least where the primary beneficiaries are the insured’s children.
Some beneficiary designation forms have a box you can check if you want per stirpes (the share of a deceased primary beneficiary goes to that person’s issue).
But in any event, if the beneficiary designation doesn’t say what you want it to say, or if you’re not sure what it says, or if you’re not sure what it means, there’s a simple solution. Sign another beneficiary designation that says exactly what you want it to say, and send it in. And say it in a way that it’s clear what it means, since after your death no one will be able to ask you what you meant. Fancy words like “per stirpes,” “per capita,” or “by representation” are often helpful since they have well defined meanings — much like the word “mortgage.”