Attorney Thomas B. Burton answers a writer's question from Oshkosh, Wisconsin about whether you can designate your Estate as the #beneficiary of a #lifeinsurance policy.
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Transcript of Video: Can I Designate My Estate as Beneficiary of a Life Insurance Policy?
Today's question comes from Oshkosh
Wisconsin and the writer asks the
following can I designate "my
estate" as the beneficiary on a
life insurance policy I am making an
online will and would like clarification
okay so first of all great question and
I salute you for putting your will
together during this time the answer is
yes you can name your estate as the
beneficiary of your life insurance
policy but the question I would ask you
if I was working with you is do you
really want to do that because remember
if you make your estate the beneficiary
of your life insurance policy that means
those funds will flow through your
probate estate and be subject to probate
court fees so let's say you have a
$500,000 life insurance policy your
probate estate would increase by
$500,000 in the fees assessed and that
amount would also increase so you may
want to do this or you may not I can
think of a scenario where you might want
it to flow through your probate estate
and that would be if you have minor
children and you want the life insurance
to fund a testamentary trust for those
minor children created in your will then
you're going to have to have a probate for
the will to set up this trust because
this would be a trust created under a
will and you mentioned doing a will here
and then you would want the money to
flow into that trust upon your death one
other way though you could create a
testamentary trust and name it directly
on the life insurance policy designation
you could say to the testamentary trust
created under my will dated and put in
the date you signed and created your
will so I guess if you were my client I
would want to ask you what's your
ultimate goal here are you trying to get
the money to minors
or are you looking to get it to the
heirs as quickly as possible and without
going to the probate court because in
that instance if they're adults I would
recommend you name them directly on the
life insurance policy if for instance
let's say it's two adult children then
the insurance company would just send
them the check when they provide the
death certificate and the proper form and
it wouldn't have to go through the
probate court so it depends on your mix
of assets and what you're trying to
accomplish here I see you're doing the
will online and again I salute you for
getting this done but I would suggest
that if you work with an attorney one of
the benefits you get is the ability to
have this back and forth and ask
questions and then when I work with my
client I try to help them design the
plan that's best suited for their
specific situation and I try to ask what
is it you're trying to accomplish and
then we find a way to do that in the
most cost-effective manner so great
question thank you for asking and we'll
see you next time!
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