1. 61667 POINTS
    Steve SavantPRO
    Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

    Video Transcript:

    Today's question is, Does life insurance go through probate? Generally, when a policy insured dies, he or she has beneficiaries. Those beneficiaries generally see the proceeds direct to them, bypassing probate. I love this because those proceeds then generally, by the way absolutely tax free, go to their beneficiaries without having the interference or going through the steps of probate.

    What that means is that that money, when it comes direct, the beneficiaries can use that money as they see fit. So there's no dictate from probate how it's done, how it's used, or that it has to go through state probate first. It generally goes to the beneficiaries, and then they can use that to pay off indebtedness or to put money aside for future obligations. And that's why I like it, because its one of the perks of life insurance. It generally goes directly to beneficiaries and not through probate.
    Answered on November 11, 2013
  2. 63333 POINTS
    Peggy MacePRO
    Most of the U.S.
    Life insurance proceeds generally do not have to go through probate unless they are left to the estate. If the beneficiary is listed on the policy as "estate", or if the persons who were listed as beneficiaries are no longer alive, then the life insurance proceeds will go through probate. If the proceeds are left to a living person, they will be paid to that person directly, bypassing probate.
    Answered on November 18, 2013
  3. 37376 POINTS
    David G. Pipes, CLU®, RICP®PRO
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    If a person dies and has left no will, the estate must go through the probate process. This provides the beneficiaries, creditors and anyone else with a vested interest in the estate with a supervised place in which to distribute assets. Legal fees can make this a very expensive process. A life insurance policy is a contract that operates at the death of a person, However, the money is sent directly to the beneficiary. The risk is that the beneficiary might not be the intended beneficiary. This is a good reason to review your life insurance policy regularly.
    Answered on October 10, 2014
  4. 246 POINTS
    Ronald Mesler
    We Protect Doctors, LLC, Boise, ID
    Great question! One of great things about life insurance (as well as annuity contracts and IRA accounts) is the disposition is generally controlled by the beneficiary designation. Courts are very reluctant to interfere with a valid beneficiary designation. When do we see problems? When the account is not periodically reviewed and the beneficiary designation--for example a parent is named and they have passed away but no new beneficiary has been named. Of course life insurance proceeds will generally become part of the probated estate when the estate is named as the beneficiary. Easy fix? Be sure to name primary and contingent beneficiaries and review them periodically!
    Hope that helps...
    Answered on February 23, 2016
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