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I am POA for my father who is 95 and lives in a VA home. I was looking over the beneficiaries listed and am confused on how myself and my 2 siblings should be listed. Right now is has all 3 but as the oldest I am shown as receiving 100% of the policy(primary). If I am deceased my brother receives 100%(secondary) and if he is deceased my sister receives 100%. Should this be set up a different way? It would be used mostly for his burial expenses and anything else needed for the funeral. It can be changed at any time so would it be wise to have all 3 children as primary beneficiary? Policy says you can do that. Just want to know the best way to list it to avoid any problems later on. Thanks

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Okay, this is what I did. My mom didn't make any funeral plans. Funeral expenses are high. I met with the funeral home where she wants to be and made all the arrangements. Her life insurance policy was split between me and my sibling. I know for a fact - that the sibling would not assist with the funeral expenses, she would take the money and run. Not wanting to have this burden, as POA - I changed the beneficiaries to be the funeral home first and then what ever is left would be split between my sibling and I. When I made this change as POA - the insurance company's legal department had to approve it. This gives me piece of mind that her funeral expenses are paid.

If this works for you, talk to the funeral home and her insurance company. Funeral expenses go up every year. Some people make the funeral home full beneficiary and that helps to become Medicaid eligible. My mother's lawyer said that it was fine. Making plans now will ease your mind.
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I think that you should ask an elder law attorney.
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Vegas, thanks for the clarification. You're right.

Saturn, just occurred to me - what kind of policy is this? Is it by any change a VA policy? If so, it matures at a certain age.

I don't recall what it was for my father, but it matured and the proceeds were disbursed to him even though I asked in writing that the policy be held and not disbursed, which as I recall was an option, but was ignored by the VA.

There's some provision about maturation of VA policies - I don't remember the issues as to whether it was at a certain age or after so many years of the policy being in force.
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You can wait to contact the life insurance company after a death....like wait months or even years. it's like doing an estate distribution, the executor can wait & should wait before a distribution as per a will. Now family that's 1 will reading from being able to buy a used car won't be happy, but an excutor can take thier time within whatever your state laws provide.

If your doing probate, the probate atty will likely know how to set up a special needs trust for a disabled heir if need be so that a heirs medicaid status isnt jeapordized. Or will know who to refer you to for an SNT.
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I agree, you cannot change what your father has set up. Its also correct that leaving money to a disabled person causes problems with Medicaid and Social Security. He may lose benefits till the money received is spent down then u have to go thruv the whole process again. If someone wants to leave money to a disabled person you may be able to set up a Special Needs trust. SS and Medicaid cannot figure in this money when establishing income. Like said, a beneficiary of an insurance policy is not obligated to use the money on bills, funeral, etc. Its their money and taxes are not paid on it. For everyones info, in the state of NJ, at least, a person with Alzheimers cannot inherit money.
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I agree with Churchmouse. Men don't get to live in VA nursing homes unless there are essentially no private assets, so pathways utilizing attorneys or probate don't apply here. The value of the policy payout here is probably less than $5000 and would have been intended to help with funeral costs and any other simple loose ends. You may even be the one who has to put those expenses on your credit card and get paid back later. So its nice to have that. I would just make sure it doesn't get cancelled for nonpayment of premium.
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There isn't really a problem, is there? It sounds as though your father took this policy mainly to ensure his final expenses were covered; that's what the funds would largely be used for, whoever turns out to be the payee; and you, assuming it's you, will be entirely free to divide whatever cash remains among the three siblings - whether equally or according to need, as you might think best.

So do you really need to change anything?
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As far as I know YOU can not change the beneficiaries your Father has to be the one to change the beneficiaries.
You can establish a Will that will direct the payments to go evenly between the remaining 2 sibling. As it is now if your brother does not want to give a portion of his inheritance to his sister he is under no obligation to do so since he would be the primary beneficiary at that time.
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GA, the will is not able to direct the insurance proceeds to someone if a beneficiary has been named through the policy.
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Assuming your father is the named beneficiary of the policy, it is his right and choice to decide how the policy proceeds should be distributed. Naming all 3 beneficiaries would be sharing the proceeds, with 1/3 to each. Apparently that's not what your father wanted.

What you need to check also is his will, to ensure that it includes the policy proceeds as assets. If so, after death assets are first directed to pay the expenses of his last illness. To me, this would include the funeral expenses.

The method of beneficiary designation now is a contingent one: you first, then contingently the other two, if you predecease him. At least that's how it sounds from your description.

I do think you need to find and review that will though, and if a general asset description doesn't include any insurance policies, contact the attorney who drafted it to prepare a codicil - assuming your father is cognizant to sign one.
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Also wanted to mention, the beneficiary of life insurance has no obligation to pay funeral expenses or any other debts your father may have. If you are POA I'm assuming you're the responsible one (not knowing about your siblings) If they are equal beneficiaries they can refuse to pay anything on these expenses leaving you with all of it from your share. I'm not sure how much money this is and anything about gifting laws, but if once expenses have been paid, if there would be very little left over, you can always split the leftover with them if you'd like. That's my intention if something happened to my parents. My dad has me primary bc he knows I will be the only one who'll take care of my mother. However if my mother passes before him, I know he'd want it split with my brother. I'd speak with an attorney because you may be able to assign that life ins money directly to them at payout to avoid gift taxes on the money, but that would need to be verified with an attorney.
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Did your father discuss matters with an attorney when he made the provisions? I'd find out. Pamstegma is right about if it goes to a disabled brother who is on Medicaid, there could be ramifications. I'd be careful to see if the POA that you have specifically provides the power to change his Life Insurance beneficiary. I'd get a legal opinion on it.

Ask the attorney about why some assets like Life Insurance proceeds are designated to go outside of the Will and outside of Probate. They can explain that and how the beneficiary can use it for burial costs and how that's done.
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If all 3 are primary, all three cannot receive 100 percent. If brother is disabled and on Medicaid, the state will take all that he gets. Try to avoid that.
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