Lets say the life policy holder dies, has life insurance and there are 6 beneficiaries listed, which were all living during and after the death. One of the beneficiaries dies two weeks later. What could happen her portion of the money?
The life policy holder does not have a living trust but has a will. The one who died two weeks later has a Living Trust. Could that portion of the money go into her living trust even if she is not alive at the moment? I assume they could write a check under her name and it could be legally placed in her trust even if she is no longer living. She did not die on or before the life policy holder. They say there is no secondary beneficiary listed. So even if the secondary beneficiary listed, should it go to the next descendant.
Let's say the six beneficiaries are to receive a benefit of $600,000 in insurance proceeds, and each one gets $100,000.
In the case of the beneficiary who dies shortly thereafter, her $100,000 will be treated as she had requested before her death. The proceeds will go to her living trust only if she had requested that they be used in that manner; if not, her $100,000 goes to her estate. If it causes the estate value to exceed the exemption threshold, then it is taxed. As far as secondary beneficiaries go, they are a non-factor in this scenario, as all primaries took part in receiving the benefit.
The basic fact is, if life insurance is left to a named person or persons, that trumps everything else. When the insured person dies, the money will go to those beneficiaries who are still alive. Period. There is no looking back.
While life insurance generally passes to the beneficiary tax free, once it is in the estate and the beneficiary passes, it will have to go through probate, if there is no will. As the other agents stated, if the proceeds were designated to be put into the living trust, that may still be possible. This article from LegalZoom may help. http://info.legalzoom.com/distribute-assets-living-trust-after-death-20613.html