Naming a Life Insurance Beneficiary or Estate by Jason
Martin
Estate Planning is all about comfort. What estate planning i...
There are two types of beneficiaries:
Irrevocable means that the policyholder cannot
change the named beneficiary and/or t...
person authorized to make such changes.
Advantages:
The policyholder https://www.youtube.com/watch?v=41yJEZqnJp0 has contr...
of 3

Naming a Life Insurance Beneficiary or Estate by Jason Martin

Estate Planning is all about comfort. What estate planning is everything about is discovering the ri...
Published on: Mar 3, 2016
Source: www.slideshare.net


Transcripts - Naming a Life Insurance Beneficiary or Estate by Jason Martin

  • 1. Naming a Life Insurance Beneficiary or Estate by Jason Martin Estate Planning is all about comfort. What estate planning is everything about is discovering the right tools to execute your basic needs. What that indicates is that we utilize the most advanced legal documents to correctly implement your desires. We personalize each and every strategy so that you get exactly what you desire. We do this using the most current tools so that we can prepare a personalized plan at the lowest possible cost. Please call us today with any questions. Financial security for the family can be as simple as taking out a term life insurance plan. However, determining who will receive the policy payment upon death may be a stressful task. Choosing a responsible life insurance beneficiary or naming a life insurance estate comes with a certain amount of preparation and deliberation. The decision should be handled responsibly. Here are your two options: Most individuals prefer the idea of having the insurance proceeds dealt with efficiently by a named life insurance beneficiary rather than a life insurance estate, which can entail the long and costly process of probate and court proceedings. Nevertheless, each option has its pros and cons. Selecting a Beneficiary When a beneficiary is appointed by the policyholder, the life insurance policy funds will be issued to that specific person. In some instances, a policyholder may wish to have the money dispersed among his or her young children at a future time, and so a trustee is then designated, whose responsibility will be to administer and distribute the funds to the heirs in accordance to the instructions left by the deceased.
  • 2. There are two types of beneficiaries: Irrevocable means that the policyholder cannot change the named beneficiary and/or the terms of the policy in any way without prior written consent from the current beneficiary. Revocable means that the policyholder can change the life insurance beneficiary and/or the terms of the policy can be amended at any time, without acknowledgement or consent from the current beneficiary. Most people choose this type of policy. Advantages: All proceeds from the life insurance policy are transferred directly to the beneficiary. The manner in which the funds are spent is at the beneficiaryâEUR(TM)s discretion. Proceeds are issued to the beneficiary regardless of whether or not the policyholder has a Will in place. Money inherited by the beneficiary from the life insurance policy is inaccessible to creditors. The beneficiary has no provincial probate costs, lawyer fees or court delays to handle. Disadvantages: Careful attention must be paid to how a life insurance beneficiary designation is worded. Improper status terms on the form can have serious effects on the way the money is dispersed. For example, naming a marriage partner as "husband" or "wife" as the life insurance recipient could lead to substantial issues, with an ex-spouse fighting for money meant for someone else. Choosing one specific child amongst other siblings as a beneficiary is not recommended as it often fosters in-family bickering during a vulnerable time. Naming one child as beneficiary leaves any children born thereafter out of the loop, unless the life insurance policy addresses such specific circumstances. Designating an Estate When an estate is appointed as the beneficiary, the life insurance policy funds are paid out to the policyholderâEUR(TM)s estate, and distributed according to the deceasedâEUR(TM)s wishes as outlined in his or her Last Will and Testament. Any amendment to how the estate is to be handled requires an update to the existing Will or the creation of a new one; the owner of the Will is the only
  • 3. person authorized to make such changes. Advantages: The policyholder https://www.youtube.com/watch?v=41yJEZqnJp0 has control over the manner in which the funds are to be spent after his or her death by leaving instructions in his or her Will. The requirement of a Will guarantees that the estate proceeds are dispensed exactly as per the wishes of the policyholder. Life insurance estate funds can be set up in trust for minor children, to be spent in a particular way or made accessible to them upon reaching a certain age. Through direction of the Will, a sum of money can be bequeathed to a charity or charities of the policyholderâEUR(TM)s choosing. Disadvantages: When life insurance proceeds are issued to an estate, settlement generally involves the process of probate. This process comes at a cost and can drag on for several months before the estate settles and the funds are finally released. Because a life insurance death benefit counts as estate income, it may be subject to taxation and unavailable to its rightful heir(s) until the Will has been sorted out in court. Creditors may have access to life insurance proceeds left to an estate. Updating or creating a Will is time-consuming and generally incurs lawyer fees. Overall, naming a life insurance beneficiary may seem to be the simpler path to follow. Still, it is vitally important to consider each option from every angle and to anticipate several possible scenarios before making a decision. When talking it over http://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning.html with an insurance agent, carefully weigh both sides of the coin in order to make an informed choice. Â About the Author: Jason Martin has researched and provided the content for this website www.abouttermlifeinsurance.com. See the YouTube channel for videos: www.youtube.com/user/CanadianTermLife http://gather.com/naming-a-life-insurance-beneficiary-or-estate-by-jason-martin/ Lastly, estate planning is about comfort. The process itself is crucial and can help you create a good, solid working plan that will look after you, your children, and also your ownerships in case of your fatality or impairment.

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