MN Life Insurance Lawyer | Exercise Caution When Including Insurance Policies in Your Estate Plan

by Flanders Law Firm LLC on January 26, 2016

As your Minnesota estate planning attorney may tell you, its often wise to leave money Minnesota Life Insurance Lawyerto some loved ones by naming them as beneficiaries to your insurance policies. Yet as common a practice as this is many testators make simple mistakes that can prevent their family members or friends from ever receiving the hard-earned money they wanted them to enjoy.

Please take a few minutes to review the following list of reminders so your future beneficiaries wont one day be denied the financial gifts you wanted them to have.

Critical Reminders That Will Help Your Beneficiaries Collect Funds One Day

  • Tell one or more family members that youve purchased a life insurance policy, and provide the name of the company. Far too often, people make this investment and forget to tell a loved one or the beneficiaries that they have ever bought such a policy. Although insurance companies have an obligation to try and locate all beneficiaries a few too many of them many not take this ethical obligation very seriously or they may postpone making the effort;
  • Avoid borrowing too heavily against each policy. Although its great to have an emergency fund you can turn to in life, never forget that this insurance money may be the only sum your spouse may receive when you pass away. For this reason, ask your estate planning lawyer if you should just create a special savings (or other) account that allows you to quickly access funds in a cost-effective manner;
  • Dont forget to convert your term life insurance to whole life insurance at the most opportune time when youre younger. While you can get cheaper rates by just buying term life insurance, if you live beyond the maximum age allowed for disbursement, your named beneficiaries will receive nothing. Be sure to convert this type of policy when youre still relatively young so you save on the new, higher premium fees;
  • Never miss any premium payments. Give serious thought to having a bookkeeper or accountant make this payment for you each month while always personally checking to be sure it was made. Without such a regular, dual review of this payment each month, its much too easy to get sick, go on vacation or otherwise forget to personally make it;
  • Never lie on any life insurance application. You must be honest and disclose all chronic health problems inquired about by the company offering to insure you. Likewise, you must state your age correctly. When youre dishonest, you greatly increasing the chances that the insurance company will one day discover your fraud and definitely refuse to pay your beneficiaries;
  • Do not name your estate as the beneficiary of your insurance policy. As your lawyer will tell you, testators who do this often unintentionally make it very easy for creditors to one day make successful claims against your estate possibly leaving little else to your spouse or others (after all debts, taxes, and probate expenses are paid);
  • You must always name secondary beneficiaries. Dont make the insurance company rich by only naming one or two beneficiaries in your policies. If they predecease you and you havent named any secondary beneficiaries, no one you care about is likely to receive this money;
  • Do not name a disabled relative as the beneficiary of an insurance policy if that person relies exclusively on monthly SSDI or SSI (Social Security) checks. A large inheritance received via a life insurance policy can render that individual ineligible for additional government payments. If you want to leave money to a disabled person ask your attorney to create the type of trust account that will not threaten the disabled persons opportunity to keep receiving monthly government checks;
  • Try to leave very young children money through a trust or other estate planning vehicle, if possible as opposed to naming them as beneficiaries of an insurance policy. This is suggested since it can prove costly over the years to pay someone named by the court as guardian to handle the money until the minor reaches the age of majority in your state.

If you will be sure to observe these simple tips in regards to including insurance policies in your estate plan, you will greatly increase the chances that all of your testamentary requests are carried out properly. It can also help in avoiding costly Minnesota probate.

Free Initial Consultations

Contact the Flanders Law Firmtoday. The firm offers free consultations to all potential clients. Call(612) 424-0398.

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{ 2 comments… read them below or add one }

Shannon Martin March 8, 2017 at 1:16 pm

Hello, my mother passed away on February 8th of this year and she had a life insurance policy to Gerber Life that started January 2016 but prior to that she had a different policy through a different company and I’m wondering since she started the first policy in February 21st of 2015 does that run concurrent with the second policy or do they start over the 2-yearclause when you switch companies?
Also my mom’s apartment building management is telling me that we have till the end of April to remove her belongings and she told me someone should be responsible for the rent for 2 months otherwise it will go to the estate. My daughter has been staying over there packing and cleaning. The manager contacted me and said she noticed someone has been staying there and no one can stay there although we’re trying to get things done. I’m just wondering if all that is legal as well? It’s just crazy to charge somebody estate for two months worth of rent but no one can say there.


Flanders Law Firm LLC March 14, 2017 at 7:37 pm

Hello. I can’t comment on your specific situation here. Please contact my office to discuss this. Thank you.


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