Home » Blog » What if Your Life Insurance Beneficiary Predeceases You?
What if Your Life Insurance Beneficiary Predeceases You?

What if Your Life Insurance Beneficiary Predeceases You?

Troy Werner and his family

Written by Troy Werner

Troy Werner has been an indispensable asset to The Werner Law Firm since joining in 2009, providing exceptional legal service to its clients.

Get To Know Troy!
POSTED ON: October 5, 2023

If you have life insurance, you know you were required to pick a single or multiple beneficiaries when you purchased your policy. When you die, the beneficiaries receive the payout from the policy.

Most people understand the overall workings of life insurance, but according to a recent article from yahoo! finance, they may not know the answer to this question: “What happens if your life insurance beneficiary dies before you?”

Beneficiaries are typically spouses, family members, friends, or charitable organizations the insured cares about and wants to protect financially after the policy owner dies. However, sometimes, life doesn’t go as planned. If there’s one beneficiary and they die before the insured, an entire plan can be undone. This can be avoided with a few simple steps.

First, make sure you name several contingency beneficiaries, not just one. If there’s only one, and they die before you and no changes were made to the policy, the proceeds from the policy will most likely be paid directly into your estate upon your death.

This means the entire amount will go through probate, making it accessible to creditors and visible to anyone who wants to look up your will information. If there are outstanding debts, from a home mortgage to student loans or debts to the IRS, claims may be placed on your estate, including the insurance policy death benefit.

It’s possible your friends, relatives, or business associates could find themselves embroiled in an estate battle over these funds. Having a secondary and even a tertiary beneficiary named on the policy isn’t difficult to do and can prevent unnecessary litigation and disputes among loved ones.

If you’ve named more than one primary beneficiary and the primary beneficiary dies, in most cases, the death benefit proceeds from the life insurance policy will usually be distributed among the remaining beneficiaries. How it is distributed will depend upon whether or not it’s done on a per stirpes or per capita basis.

Per stirpes means the money will be divided equally between beneficiaries if the primary dies. If the proceeds are to be split between two children, but one has died before you, the surviving beneficiary still gets their intended share. The other share is still divided equally among the deceased beneficiary's children. Under a per capita arrangement, the death benefit would go to the remaining primary beneficiary.

What if you’ve named a nonprofit organization, but it shuts down or is absorbed by a different organization? A few different scenarios may occur. One is that the death benefit could be paid to your estate, which would be subject to probate. The second is the organization that superseded the organization you named as your beneficiary may step forward to claim the benefit.

Talk with your beneficiaries about any life insurance policies where they are the beneficiaries, and let them know your wishes for how the death benefit will be distributed. After you pass, they must contact the insurance company, ideally with a copy of the policy. They won’t automatically get the benefit unless they make a claim to the money and provide the required proof. Your estate planning attorney should be informed of your policy and beneficiaries, so they can help when the time comes.

If you need help in setting up your estate plan, or if you need help understanding how life insurances work with wills and trusts, we are here to help.  Our probate attorneys in Los Angeles can guide you through it.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: yahoo! finance (September 5, 2023) “What happens if your life insurance beneficiary dies before you?”

Share This Post

Why Our Living Trust Law Firm & Probate Attorneys?

Founded in 1975 by L. Rob Werner and serving California for over 48 years, our dedicated attorneys are available for clients, friends, and family members to receive the legal help they need and deserve. You can trust in our experience and reputation to help navigate you through your unique legal matters.

Whether you need help creating a living trust or navigating probate, our living trust law firm's compassionate team of estate planning lawyers and probate lawyers are here to help you and ready to answer your questions.

Our goal is to make your case as easy as possible for you. Hiring a lawyer can be a daunting task, but it doesn’t have to be. From the moment you contact our firm, through the final resolution of your case, our goal is to make the process easy and understandable. We cannot change the fact that probate is a long and complicated process, but through our Werner Law Firm Difference, we strive to go out of our way to keep you informed of your case through every step of the way. We are constantly refining our processes and procedures for a more streamlined and calm client experience. Our goal is to have you feel like a burden was lifted from your shoulders, and that we made the whole process an easy one

If you're dealing with a legal matter, we urge you to schedule a free initial appointment today and join the many satisfied clients who have contacted Werner Law Firm.

Book an Initial Call Now

Join Our eNewsletter and our California Estate Planning and Probate Blog Digest

Werner Law Firm logo
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. See full disclaimer here.
Santa Clarita, CA Office

27433 Tourney Rd, Suite 200
Santa Clarita, California 91355

Los Angeles, CA Office

445 S. Figueroa St., Suite 3100
Los Angeles, California 90071

Bakersfield, CA Office

4900 California Ave, Tower B-210
Bakersfield, California 93309

Newport Beach, CA Office

23 Corporate Plaza Dr., Suite 150
Newport Beach, California 92660

Lancaster, CA Office

626 W Lancaster Blvd.,
Lancaster, California 93534

Pasadena, CA Office

35 North Lake Avenue, Suite 710
Pasadena, California 91101

Simi Valley, CA Office

2655 First St, Suite 250
Simi Valley, CA Office, California 93065

Encino, CA Office

15760 Ventura Blvd, Suite 700
Encino, California 91436

Oxnard, CA Office

300 E Esplanade Dr., 9th Floor
Oxnard, California 93036

Santa Barbara, CA Office

7 W. Figueroa St., Suite 200
Santa Barbara, California 93101

IMS - Estate Planning and Elder Law Practice Growth Advisors
Powered by