A life insurance policy pays whoever is named on the beneficiary form, regardless of what your will says. The most common mistakes are forgetting to update the form after a divorce or a death, naming a minor child directly, and leaving the primary beneficiary blank. Each can send the money to the wrong person or delay it for months.
A divorce, remarriage or death does not automatically change a beneficiary form. An ex-spouse listed years ago can still collect, depending on the policy and state law.
Insurers generally will not pay a large sum to a minor. A court may appoint a guardian to manage the money, which takes time and adds cost. A trust or custodial account set up in advance avoids that.
If your primary beneficiary dies before you and no backup is named, the payout may default to your estate and go through probate.
Vague wording can create disputes about who qualifies and how shares split, especially with blended families. Naming each person and the percentage prevents it.
Beneficiary designations pass outside the will. If the form and the will disagree, the form wins for that policy.
Pull the beneficiary form on each policy after a marriage, divorce, birth, death in the family or major change in your finances. Confirm a primary and a contingent beneficiary, the exact names, and the percentages. Guy Jean can request your current designations from the carrier and help you update them.
Beneficiary rules and trust options vary by state and situation. Guy Jean is a licensed insurance agent, not an attorney, so he works alongside the estate attorney you already have or can point you toward one.
No. A life insurance payout goes to the named beneficiary on the policy, not according to your will. If the two conflict, the beneficiary form controls for that policy.
If you named a contingent beneficiary, the money goes to that person. If you did not, the policy terms or state law decide, and the payout may go to your estate, which can mean probate.
Yes. Naming a trust is a common way to manage money for minor children or heirs who need oversight. Trust setup should be done with an estate attorney so the language matches your goals.
After any major life event, and as a habit every few years. A form that was correct when you signed it can be wrong after a divorce, remarriage, birth or death.
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