I was recently working on an estate matter which demonstrated the importance of updating and keeping track of your beneficiary designation. Many of our seniors obtain life insurance to provide for their funeral. However, the person designated as the beneficiary does NOT have to use the monies for the funeral. They could choose to keep the money for their own benefit.
In this case, the person designated her brother as the beneficiary under her life insurance policy. He had agreed to use the money to take care of her funeral expenses. Since he WAS her closest living relative, he would not have to come out of pocket to bury his sister. WELL, her brother predeceased her and her secondary beneficiary was her niece (her brother’s daughter) who did not have the same interest as the decedent’s brother. The niece wants to use the insurance to purchase a house and is only willing to provide some funds towards a funeral. What is to be done? Either the other family members will have to all contribute towards a funeral or there will be a cremation or an inexpensive service, less than what would have been affordable with the insurance proceeds.
SO, keep your beneficiaries up to date BUT more importantly it would be better to just prepay your funeral and not depend on others to use insurance proceeds in your best interest. Contact us with your estate planning, probate, guardianship, and business succession planning needs at www.ythlaw.com