If my aunt left me money in her Trust and made me the beneficiary of her life insurance policy, can the amount of the life insurance benefit be deducted from the amount specified in the Trust?

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If my aunt left me money in her Trust and made me the beneficiary of her life insurance policy, can the amount of the life insurance benefit be deducted from the amount specified in the Trust?

Asked on June 17, 2015 under Estate Planning, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Legally, the amount of life insurance could be deducted from the amount specified in the trust but only IF the documents creating the trust themselves specify that this would happen. It would not be automatic: normally, the trust is independent of other sources of money. While the person making the trust can specify that other sources, like life insurance, would be taken into account, she would have had to specify that when making the trust.


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