Owners, Beneficiaries, and Insureds

[WinoBlues]

The fact that Johnny and Candy are separated would not prevent her from claiming it as his wife if they were not actually divorced.

Yup.

When I review an ophan policy the beneficiary wording is usually an easy wedge between the owner and the deadbeat agent.

 

[Allen Trent]

Example :
Primary = Johnny Smith, son, 50% and Suzy Smith, daughter, 50% vs
Johnny Smith and Suzy Smith Equally or the survivor. Now Johnny dies before Mama Smith and no change of bene done. By the way, Johnny is separated from that cheat'n two-timing Candy Smith.

Who get's Johnny's 50%

depends on if you marked the Per Stirpes box or not. If per stirpes, it goes to Johnny's offspring that can be found & rounded up. If not per stirpes, it is per capita & Suzy gets all 100%

I know we are in FE forum, but Per Stirpes is the way to go in most Life & retirement accounts & Annuties & even inside Trust language. this way, the primary beneficiary can disclaim their share & it will flow to their own children. Some beneficiaries are doing so well, they dont need the money, but disclaiming anything that is per capita doesnt make it to your own children, it goes to other beneficiary.

This per stirpes & disclaimer (being treated as already deceased) can be an awesome tax move on qualified accounts & large gain Annuity accounts to let the money bypass you if you are already in good shape & go to children in lower tax brackets.

Also great to use disclaimer on spousal beneficiaries that dont need the money of their spouse because they either have enough or they are facing nursing home soon. I have seen 90 year old spouses receive their spouses retirement or Annuity funds & proceed to go into nursing home & exhaust it all. had the spouse disclaimed it (if per stirpes), it would have went to the kids & not been exposed to the nursing home spend down. Most carriers & investment firms that allow Disclaimers want something showing you sought legal advice before signing the disclaimer to be treated as if you pre-deceased the insured/owner/retirement owner.

 

[Allen Trent]

I have only had a couple of insureds that wanted a per stripes designation in the last 50 years.

definitely much more common for per stirpes on Annuities, IRAs, etc. Not doing per stirpes on accounts of sizeable values can completely mess up the clients overall estate plan. Have seen this also with clients putting 1 of 3 children on Bank CDs or the house deed so that 1 kid could handle. But doing this gave a much, much larger than 1/3 share of the total amounts they had intended to be split 3 ways & have any 1/3 share of a deceased child flow to the grandkids.

FE per stirpes likely not needed & only complicates the claims process on a small amount