If I am paid the life insurance proceeds after my mother died 2 years ago, is it part of the brokerage account on her estate?

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If I am paid the life insurance proceeds after my mother died 2 years ago, is it part of the brokerage account on her estate?

We got a life insurance check about 1 1/2 years ago for $43,000. The estate just settled and we

are being told that the life insurance proceeds are being held in a brokerage account.

Asked on May 17, 2018 under Estate Planning, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Were you the named beneficiary? If so, the money should have gone directly to you: insurance policies are contracts and, like any contract, must be enforced according to their plain terms--including whom the contract (policy) says is paid. If you were the beneficiary but the money is not being paid to or released to you, you could file a legal action (sue) for it: you would sue (name as defendants) the estate, the personal representative/executor, the insurer, and the entity (e.g. bank or broker) holding the account; you have to name everyone who might have an interest in the outcome, the power to get you the money, and/or be responsible for the money not getting to you, to make sure you involve the party(ies) with the power to correct the situation.
If some other still-living person other than you was the beneficiary, then he/she could sue for the money. If the only named beneficiary(ies) died before your mother, or the policy named the estate as beneficiary or there was no named beneficiary, then the money would go to and become part of the estate, and would be distributed together with the other estate assets, to whomever inherits under the will or by "intestate succession" (rules for who gets what when there is no will).


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