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Does a life insurance policy go through probate?

When your estate goes through probate, it gets divided among your heirs and other beneficiaries. This process is long and complicated for some people, while it is relatively easy and straightforward for others.

What about a life insurance policy? It pays out when you pass away. Does this mean that it then becomes part of your estate and has to pass through probate, or does it get to skip that process?

Generally, your life insurance policy will skip probate. You likely named a beneficiary, and so the funds will go to that beneficiary directly. They do not need to be divided with the rest of your estate.

If someone neglects to name a beneficiary or the person who was named has passed away, then this may not be true. That's why it is so important to name a beneficiary and update the policy to reflect any necessary changes.

This same rule typically applies to pension plans, individual retirement accounts (IRAs) and 401(k) accounts that also allow you to choose a beneficiary.

Since the life insurance policy does not enter probate, it is important to point out that the instructions you put in your will do not impact it. It goes to the beneficiary first. For instance, if you name your spouse as the beneficiary and then put in your will that the policy should go to your kids, it is still going to go to your spouse.

When doing your estate planning, keep in mind the various ways that you can pass on your assets to your loved ones and others. Your San Diego estate planning attorney can provide valuable guidance.

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Law Office of Suzanne P. Nicholl, PC
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