CONFUSED - Discovered Lost Trust and Policy

[Worrag]

First time here. Very confused by a situation that just arose and cannot get a meeting with agent for a month. Looking for any clarification, advice, best guesses, etc..

My father passed away unexpectedly 7 years ago. At the time had a policy that went to my mother. We search to see if there was any other policy at the time but found nothing. Yesterday an agent from VA where we used to live called my mother requesting the death certificate to update the Trust they had set up. News to us although now there is some vague memory of this.

Apparently there is over 80k in an account that has been paying $160 a quarter on a policy for over 15 years. Supposedly the policy is for $8M. Math doesn't seem to add up here. So we tried to call the agents company today. Got in touch with assistant. Little luck other than verifying statements above. However we did get the name of the attorney that drafted the trust.

Contacted him. He has left the firm he was with and did not take the paperwork with him. He is now trying to track it down. He did verify once again the above statements but also said that he doesn't think the premiums have been paid. BUT the policy is still active.

Leads me to here and my questions. If all the information above is correct. 1.) Could $160 a quarter possibly be for a policy that size? 2.) If not, and the premiums have not been paid. Then what is the $160 paying for? 3.) If the premiums have not been paid. How is the policy still active?

Again at a loss. Trying to contact as many people as possible. Everyone is stating they will get back to us. No real information yet. AND THE SUSPENSE IS KILLING ME.

Any ideas? Thoughts?

 

[DHK]

No, $160 quarterly would not nearly adequately fund an $8M policy, even if he was a baby when he got it (and no insurance company would issue an $8M policy on a baby).

For a policy to be approved at $8M, there would need to be significant assets to justify that amount. I'd wonder if there are some assets that haven't been disclosed to you.

For an AGENT to contact you to update the trust, I would assume it would be an ILIT - Individual Life Insurance Trust. These are part of a significant estate to help pay and/or legally avoid estate taxes.


I'm actually more surprised that you may not know there's more to your father's estate - should all this be in your favor.

However, my mental "BS Scam Alert" is also going off as well. I would not submit them any money to do what they need to do and should've done some time ago. I'd hate to see you get duped into paying thousands of dollars in the hopes of getting an $8M payout that may not exist.

 

[Worrag]

Would agree completely with the BS meter except that the agent is a friend of the family and very well respected. Why he is just getting to this now is the question.

There were/are significant assets. I have some confidence that the account and payment of the 160 are legit. What is truly confusing is this other part. Both are saying 8M. And the attorney is claiming the premiums have not been paid but the policy is active. Makes no sense. Again very confused.

Thank you for your response. I will eventually get the sit downs and figure this out.

 

[VolAgent]

Were I betting man...

I would say it is a whole life or universal life that had a significant dump in and it has been living off that cash value.

Still sounds too good to be true. I would find out the name of the company and try to independently verify everything.

 

[pfg1]

The premiums can be paid by the policy cash value and keep the policy in force for quite some time, in many cases. My guess is a whole life with pua div option, and its using automatic premium loans to pay qtrly.

Now, as to the $8m.... those premiums you stated don't line up at all, neither does the cash value. Their could be a possibility that the policy is using the dividend to pay the premiums. Again, assuming its a div paying whole life. There might be a decent dividend spinning off, and the $160/qtr is excess that the div doesn't cover. But the low cash value still doesn't add up. ?? Most policies of that size would have hundreds of thousands, if not maybe even millions in cash value, assuming the policy has been in force for some time.

My question, why didn't anyone know there was a trust? Man that could throw a big ol wrench into things...

Good luck, keep us posted.

 

[NWBenefitProvider]

Nothing good to add other than I hope that there is some truth to all of this and you and your family end up with a nice windfall. In the meantime I'll sit over here and enjoy some popcorn while this unfolds. Certainly interesting.