1. 4330 POINTS
    Jerry Vanderzanden, CLU, ChFC
    Co-Founder, Coastal Financial Partners Group, California
    If there is no named beneficiary or if the named beneficiary in a life insurance policy is not living at the time the life insured owner dies, and there is not a back up (contingent) beneficiary named, the proceeds go to the estate. This needlessly subjects the policy proceeds to probate.  

    Always name a primary and back up beneficiaries and have a life insurance professional review your policy at least every three years to ensure your policy will perform as you currently desire.
    Answered on May 18, 2013
  2. 110 POINTS
    Bryan McCloskey, CASL®
    Old Security Trust, West Chester, PA
    There may be two questions being asked here.  
    1.  Are the death benefits of life insurance considered as part of a deceased's estate?
    2.  Do these life insurance proceeds go into the probate process after death?

    Life insurance proceeds and value can be considered a part of the OWNER'S estate for estate tax purposes if it is either owned by the person at the time of the insured's death, or had been transferred away within the past three years.  This can get complicated, and should be discussed with a professional in your area who can help you understand better.

    Now, for the second question.  If structured correctly, just like Jerry said above, one of the benefits of life insurance is that it BYPASSES probate and is not dragged into that process.  To take advantage of this, you should have your beneficiary designations reviewed on a regular basis by a trusted professional in your area.
    Answered on May 18, 2013
  3. 0 POINTS
    David RacichPRO
    Fountain Hills, Arizona
    If a life insurance policy is not owned by an irrevocable life insurance trust or owned by a legal business or charitable entity, it is(with few a exceptions) in the policy owner’s estate. That, in itself, may be a nonevent depending on the size of the estate. If the assets of the estate including the death benefit proceeds total less than the unified credit, there may be very well no federal taxable event.  However the resident state has its own exemptions and in most states is considerable less than the federal unified credit. So it’s important to seek legal counsel to determine the ownership of life insurance.
      
    Answered on May 18, 2013
  4. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    Life insurance proceeds generally do not go into the estate at the time of the insured person's death. However, some people designate the estate as the beneficiary, in which the death benefit would go through probate. They will also go into the estate by default if all beneficiaries named are deceased. To avoid life insurance proceeds from going to the estate, name a person or organization as beneficiary.
    Answered on September 6, 2013
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