Question about life insurance beneficiary precedence

[Newby]

My mother, who is the stated beneficiary of my father's life insurance policy, passed away over 20 years ago, and my father, who remarried after her death, passed away a few months ago. After my father died, his life insurance company (private) contacted me for help in contacting my mother, and I informed them that my mother already predeceased my father. They want me to submit death certificates for both my mother and my father in order to expedite the policy's proceeds. The life insurance company, on the first couple of calls, would not tell me if the policy has any listed contingency beneficiaries (such as me and my siblings), saying that they could only determine that after reviewing the policy once the needed documents are submitted. However, their order of precedence for proceeds is the following: 1) the living spouse of the insured; 2) children of the living spouse; 3) etc

Today, I contacted them after they again contacted me concerning receiving the documents (which I have yet not submitted). The representative told me she didn't see any listed contingency beneficiaries for the policy, which contrasts with what earlier reps told me, since they had to research the matter. (Could she be wrong?)

Do I understand this correctly: my father's widow, who had nothing to do with the policy's stated beneficiary (my mother) would then receive the policy's proceeds instead of me and my siblings (their children)? Is there a way to legally challenge this, because had my father passed away before he remarried, we, his children would have been the beneficiaries. What incentive does the insurance company think I have to submit documents that would only serve to expedite our father's living spouse in receiving the policy's proceeds?

If all living beneficiaries are dead it will either go to the children of the listed beneficiaries or to his estate depending on how that company handles it.

 

[Allen Trent]

It's a generation skipping trust that was set up by my grandparents with my dad. According to our own estate lawyer advising us, because there was apparently no GST exemption written into the trust, a 40% tax is due, based on the value of the trust at the date my father died.

On the probate: in the absence of an officially-filed will, my father's estate (not including the life insurance policy) had already been entirely transferred to his widow prior to his death by making her a co-owner on pretty everything he owned (house, bank accounts, etc.). Therefore, she and her estate attorney are able to avoid probate, at least on those things not including the life insurance policy. The life insurance policy is a separate thing, and so far, the insurance company has only been contacting me about it. They told me that the usual order of precedence, if there is no listed contingent beneficiaries, would be 1) living spouse; then 2) any surviving children, 3) parents (who are deceased); 4) estate. However, the lawyer advising us has said that my father's widow would have to file some estate paperwork to receive any proceeds from this policy, so perhaps a probate might be involved (I'm guessing). I'm hoping that my siblings and I were listed as contingency beneficiaries (assuming the last rep I spoke to was wrong about that), but I guess the only way to find out for sure is if we went ahead and filed a claim. At the moment, our estate attorney has been concentrating exclusively on the trust issue, with the life insurance policy a newer thing I told them about after I was contacted by the company.

Ok, now you are adding details & i dont feel near as sorry as I had from your original/follow up post. I had the impression that somehow you were being left with all the work, but that all your family members were left out in the cold with nothing from your fathers estate.

But now you are sharing that you will be the recipient of a generation skipping trust---which is extremely rare and generally only a tool of the ultra wealthy, etc. any taxes due at the end of receiving this are likely a lot smaller than had taxes been paid years ago. The monies that continued to be invested without taxes likely grew to more than had taxes been paid then & invested, etc. If I recall, the 1st $5-$6M in a GST is exempt from estate tax & the 40% tax is on amounts over that. If that is the case & you will receive a share of an estate worth over $5M, I honestly dont have near the sympathy I had because your follow up post surely didnt give an accurate depiction of the overall situation

Hire & follow the directions of a great estate attorney & CPA.

PS-- you can always disclaim your share as a valid tool

 

[DHK]

Hire & follow the directions of a great estate attorney & CPA.

And at this point, that's the best and only advice this thread and forum should be giving.

 

[Advent]

Ok, now you are adding details & i dont feel near as sorry as I had from your original/follow up post. I had the impression that somehow you were being left with all the work, but that all your family members were left out in the cold with nothing from your fathers estate.

But now you are sharing that you will be the recipient of a generation skipping trust---which is extremely rare and generally only a tool of the ultra wealthy, etc. any taxes due at the end of receiving this are likely a lot smaller than had taxes been paid years ago. The monies that continued to be invested without taxes likely grew to more than had taxes been paid then & invested, etc. If I recall, the 1st $5-$6M in a GST is exempt from estate tax & the 40% tax is on amounts over that. If that is the case & you will receive a share of an estate worth over $5M, I honestly dont have near the sympathy I had because your follow up post surely didnt give an accurate depiction of the overall situation

Hire & follow the directions of a great estate attorney & CPA.

PS-- you can always disclaim your share as a valid tool

No, we discovered the value of the what's left of the trust is under $350K and is still subject to the 40% GST, for some reason. As I said earlier, there was no GST exemption allocated in the trust. That is straight from the attorney who we hired (and who we will owe a ton of money to after this is all said and done.) There might be some other factors dictating this, like spending from the trust that had already been done, but I'm not sure (my brother is the one dealing with the attorney). And as far as our dad's estate is concerned, the trust exempted, we are being left with nothing, I thought I made that clear. We even lost a lifetime of family mementos, like all the family photographs that were in our dad's house and which were cleaned out as she prepared their house for sale. Also, our dad's wife and her lawyer are demanding some kind of pay-off from the trust to pay her own taxes -- a payoff as an agreement to relinquish her co-trust role. Hard to say what will be left after we pay the lawyers.