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Life Insurance as part of estate?

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zapgrab

Junior Member
What is the name of your state (only U.S. law)? Arizona

My father killed his wife, and then killed himself. His wife was the beneficiary of his life insurance policy, but there was a Living Trust for the rest of their assets.

His wife has 2 living relatives - her father and her brother. My father has children from his previous marriage (including myself), but they have no children together.

We are about to receive a substantial amount of money as the beneficiaries of his life insurance policy.

Is there any way her family can petition a court to include the life insurance settlement to be considered as a target for a potential wrongful death lawsuit? What about other creditors?

All information I can find indicate that once the policy is paid out, the assets belong to us children, and cannot be considered part of the estate. I have, however, received advice not to touch the money yet because there is a possibility (if a wrongful death suit is filed) that a judge could require the insurance money be given back to the estate.
 


ecmst12

Senior Member
From everything I've ever been told, life insurance proceeds belong solely to the beneficiary and can never be considered part of the estate, unless the estate itself was the beneficiary.

But didn't you say the wife was the beneficiary?
 

zapgrab

Junior Member
Yes, but she is deceased - murdered by my father. Natural designation of beneficiaries gives the policy money to us children.
 

zapgrab

Junior Member
I'm inclined to say contingent, but I don't know for sure. It is a federal life insurance policy, which has the default beneficiary order of spouse/children/parents/etc. Since his wife was the specified beneficiary, I have been told that we become recipients of equal shares of the policy proceeds since she was not alive to claim any portion of the policy.

Death certificates show the time of death to be the same, but I was informed that the Uniform Simultaneous Death Act makes that fact irrelevant since the time of death was within 120 hours:

http://www.nccusl.org/nccusl/uniformact_factsheets/uniformacts-fs-usda.asp

Does that make sense?
 

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