Do insurance proceeds belong to an estate?

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Do insurance proceeds belong to an estate?

My late mother left a Will stating that my sister and I should share equally in the proceeds of her estate. Simply stated in just such a fashion. My mother had a life insurance policy that she told me was to cover he final debts (burial, etc) but listed only my sister as the beneficiary. My sister was named as executor of the Will and has stated that the entire proceeds from the insurance policy were intended for her alone.

Asked on June 18, 2013 under Estate Planning, Virginia

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

I am so sorry for your loss.  The answer to this question is really "it depends" - and by that I mean it depends on the facts of the case.  Life insurance policies have a designation of beneficiary which, if properly filled out, allow the proceeds to pass "outside the estate" to the person named.  If the beneficiary is not properly filled out or filled out improperly or under undue influence (found on a challenge), then the policy most likely has a default beneficiary - the estate. Here it sounds as if your Mom designated your Sister as the beneficiary so the proceeds would pass to her directly.   


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