A life insurance policy payout can be financial grant for deceased relatives. However, many wonders if the payout will go through probate. Life insurance proceeds generally do not go through probate, but several factors could make a life insurance payout pass through probate.

  • Whether or not named beneficiaries are alive.
  • Whether or not the life insurance policy has any beneficiaries.
  • Whether or not the policyholder planned the payout to afford debts.

The life insurance payout will not be probated if your policy’s beneficiaries are alive. Instead, the payout will go toward your living beneficiaries.

What Happens When Life Insurance Goes To Probate?

When the life insurance payout goes through probate, the proceeds will be distributed according to the instructions in the deceased will. If there is no will, the proceeds will be distributed according to state intestacy laws. The estate executor ensures that all debts and taxes are paid before any remaining funds are distributed to beneficiaries.

How To Avoid Life Insurance Probate

Keeping your life insurance out of probate is easy. All you need to do is ensure your beneficiary is alive before you die. Make sure you name a primary and secondary beneficiary on the policy. This ensures that the death benefit will go directly to these beneficiaries and not have to go through probate court. Keep these beneficiary designations up-to-date, so your assets and will are distributed according to your wish.