Inheriting Life Insurance

[kerryrey]

I really need someone’s help. My wife’s father is soon to pass and he has no will. He does however have a life insurance policy that had both of his two children listed, however her brother committed suicide 3 years ago and his name is still on the policy. My wife’s brother that has now passed on was once married and had 3 children; his ex-wife has now since re-married (3 months after his death). My question is (since my father-in-law having no will and not having changed the verbiage in his life insurance policy) are the grand children and my wife's brother's ex-wife entitled to any of his life insurance? The policy says it should be paid to his daughter and his son, nothing about their survivors or offspring. The policy is not all that large and if it all will go to my wife we plan on setting up funds for the children, the problem is the ex-wife. The other question I have is the policy is for 150,000 from what I have been reading that falls under the Federal estate tax. Is that correct? Please help.12

 

[ALawyer]

Although as a matter of law once the named beneficiary dies, absent other language in the policy itself, or in the beneficiary designation, and assuming there are no named contingent beneficiaries, the proceeds are payable to only the surviving named beneficiaries, or the estate of the deceased.

Of course were it to pass to your father in law's estate, and if there were no will, if the deceased brother had children (natural or adopted) they would share half. If there is a will then someone could seek to delay probate etc. on behalf of the broether's kids.....

IF any of the widow's kids are your brothers, it can create a real bad situation, and even a legal fight that creates delays and expense. And ii would not make for a healthy set of family relationships, however.

As for Federal estate tax, it does not generally come into play until the TOTAL ESTATE exceeds $1 milliuon, including the value of all real estate, stocks, bonds and other assets, 401k, IRA, etc. and life insurance.