When delving into the complex realm of estate planning, it’s essential to dispel some common misconceptions. One prevalent myth is the belief that your life insurance payout is determined by your will. But the truth may surprise you! Let’s demystify this notion.

Understanding Life Insurance: Life insurance serves as a contractual agreement between you and your chosen insurance provider. You make regular premium payments, and in return, the insurance company commits to disbursing a predetermined sum to your nominated beneficiaries upon your demise. Typically, life insurance payouts are processed promptly after the insurer is informed of the policyholder’s passing. It’s a straightforward concept, right?

Beneficiary Trumps Will: Here’s where it gets intriguing. The beneficiary (or beneficiaries) specified in your life insurance policy holds a position of supreme authority. Irrespective of what your will dictates, the life insurance proceeds are directed straight to the named beneficiary.

For instance, imagine you purchased a life insurance policy years ago when you had only one child, Rebecca, and designated her as the beneficiary. Fast forward a decade, and you now have three children. You finally draft your will, stating that all your assets should be equally divided among your three kids. Regrettably, this “everything” doesn’t encompass the life insurance benefit! Rebecca is entitled to the entire life insurance payout, leaving your other children with nothing.

Key Takeaways: If you’re considering incorporating life insurance into your estate planning strategy, it’s imperative to keep beneficiary details up to date. Life is ever-changing, with marriages, births, and deaths influencing your choice of policy beneficiary. Regularly reviewing and revising this information can prevent future complications and emotional distress.

Begin Your Journey: While wills undeniably play a pivotal role in estate planning, it’s vital to acknowledge that not all assets fall under their purview. Are you ready to embark on your estate planning journey? Our process is straightforward. Commence by scheduling a Peace of Mind Planning Session. During this session, you’ll outline your objectives, and we’ll present tailored options along with our exclusive flat fee pricing. Mention this blog post, and we’ll waive the $450 session fee. Book today through our https://calendly.com/laiturnerlaw/peace-of-mind-planning-session and take the first step toward securing your future.

Estate PlanningLife InsuranceWillsTrustsEstate Plan AttorneysLife insurance vs a will