Are life insurance proceeds part of deceased’s estate if they are payable to a person?

UPDATED: Sep 30, 2022

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Are life insurance proceeds part of deceased’s estate if they are payable to a person?

Mom’s 3 life insurance policies were made payable to me, as sole beneficiary. However, after paying her funeral expenses, the attorney said the proceeds were part of her estate and made me deposit the proceeds, approximately 11,000, into the estate checking account. How can they be part of her estate if I was the sole named beneficiary of all 3 policies? I thought life insurance policies were paid to the named beneficiary and the proceeds were theirs to keep?

Asked on September 4, 2016 under Estate Planning, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Polices proceeds payable directly to a named beneficiary are not part of the estate, the same way that the money in a "payable on death" (POD) or "transfer on death" (TOD) account is not part of the estate. The money would yours, not the estate's, if you were the named beneficiary on the policies. Based on what you write, this lawyer apparently either did not understand the law or deliberately misinformed you. The money should be returned to you.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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