What is the law regarding life insurance policies when the named beneficiary predecease the insured?

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What is the law regarding life insurance policies when the named beneficiary predecease the insured?

My stepfather had life insurance policy through his former employer and my mom was the sole beneficiary. She died 2 weeks before he entered the hospital and passed himself 1 week later. He did not get his policy changed to a different beneficiary before this happened. The policy is for $4000 and there whole estate is worth less than $8000 with that included. There is a Will which names me as the successor executor and also the person that all personal property passes to with the words, including insurance therein and residuary property. He has adult children of his own but they have not been all speaking terms for years. I am told that because no other beneficiary was on the life insurance policy that this must go to his children and cannot pass to the estate. Is this true? What happens if they do not come forward to claim this policy? Is there a time limit on when and if this could ever go to the estate?

Asked on September 11, 2018 under Estate Planning, Wisconsin

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If no contingent benenfciary was listed regarding the policy, then the proceeds pass into the insured's estate and are passed through the "residuary clause" in the Will. 

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If there was no successor or secondary beneficiary, the life insurance proceeds to NOT go to his children--they do become part of his estate and they will be distributed as per the instructions of his will. Whenever there is no living beneficiary, the money becomes part of the estate.


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