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Does your life insurance policy go through probate?

On Behalf of | Mar 3, 2022 | Estate Planning

Probate is the process used to distribute your assets after you pass away. If you put things in a will, the will does tell the family what you want to happen, but it still needs to go through probate as the assets are divided. 

But perhaps you have a life insurance policy that forms a large portion of your estate. Is that policy going to have to go through probate along with everything else? 

Who did you name as the beneficiary? 

The general answer here is no, that the life insurance policy will not have to go through probate. The reason for this is that you pick a beneficiary when you buy the policy. This policy doesn’t even have to be named in your will at all. The insurance company already has the instructions they need, and they will pay your beneficiary when they have proof of your passing. There’s no need for probate or anything more complicated. 

That said, if you didn’t name a beneficiary or if your designation is outdated – such as if the beneficiary has already passed away before you – then the life insurance policy may simply become part of your general estate. If this happens, there is no clear direction for the rest of your family and there is no beneficiary who can take payment from the insurance company. This may mean that the funds from that policy go through probate along with the rest of your estate. 

It’s important for your family that this all goes smoothly, so make sure you take the time to consider exactly how you want to set everything up.