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Life Insurance and Estate Fees.

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  • 14-01-2020 5:51am
    #1
    Gizzy Ireland
    Registered Users Posts: 3 ✭


    Our deceased parent left an insurance policy for the children. The executor of the estate is one of the children and has not released any funds, stating that it went towards Estate fees. Is this correct/legal?

    Thank you.


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    #2
    NUTLEY BOY
    Registered Users Posts: 2,344 ✭✭✭NUTLEY BOY


    Legal advice not permitted here.

    However, on general principles, I would have thought that the executor was obliged to account for the matter at issue and to apply the life assurance proceeds correctly as an asset of the estate if that is where they should have gone.

    Also, I would be curious to know if the policy had nominated specific beneficiaries as distinct from a general designation like the legal personal representatives of ABC deceased and intended for the general assets of the estate.


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    #3
    Gizzy Ireland
    Registered Users Posts: 3 ✭Gizzy Ireland


    Thank you for clearing that up re what can and can't be discussed.

    To answer your question, the Insurance policy specified beneficiaries. I was under the impression when that was the case the Insurance couldn't be used for any other reason.


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    #4
    ohnonotgmail
    Registered Users Posts: 40,321 ✭✭✭✭ohnonotgmail


    Gizzy Ireland wrote: »
    Thank you for clearing that up re what can and can't be discussed.

    To answer your question, the Insurance policy specified beneficiaries. I was under the impression when that was the case the Insurance couldn't be used for any other reason.

    that would be my understanding as well. the insurance company should have distributed the policy amount directly to the beneficiaries. If i were the people involved i would be talking to a solicitor.


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    #5
    UrbanVixen
    Registered Users Posts: 33 ✭UrbanVixen


    Try and get a copy of the policy as the way it was written should answer the core question in relation to entitlement to it's proceeds.

    If the will was admitted to probate see if the Probate Office will give you a copy of the schedule of assets. I would be curious to know if the policy proceeds were included as part of the assets of the estate.


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    #6
    randomrb
    Registered Users Posts: 351 ✭✭randomrb


    ohnonotgmail wrote: »
    that would be my understanding as well. the insurance company should have distributed the policy amount directly to the beneficiaries. If i were the people involved i would be talking to a solicitor.

    The insurance company are entitled to make a payemnt to the executor as they have a legal obligation to distribute correctly. If there has been a misuse they are personally liable. Is the executor doing the work himself or do they have a solicitor?


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    #7
    ohnonotgmail
    Registered Users Posts: 40,321 ✭✭✭✭ohnonotgmail


    randomrb wrote: »
    The insurance company are entitled to make a payemnt to the executor as they have a legal obligation to distribute correctly. If there has been a misuse they are personally liable. Is the executor doing the work himself or do they have a solicitor?

    Life policies with named beneficiaries do not form part of a persons estate. Or at least the revenue commissioners dont seem to think so. the insurance company should have distributed the money directly to the benficiaries.

    https://www.revenue.ie/en/gains-gifts-and-inheritance/documents/guide-to-completing-an-inland-revenue-affidavit-ca24-2003.pdf
    Annotation-2020-01-15-152727.jpg


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    #8
    Gizzy Ireland
    Registered Users Posts: 3 ✭Gizzy Ireland


    Thank you all so much. That gives me something to work with. Appreciate it.


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    #9
    randomrb
    Registered Users Posts: 351 ✭✭randomrb


    ohnonotgmail wrote: »
    Life policies with named beneficiaries do not form part of a persons estate. Or at least the revenue commissioners dont seem to think so. the insurance company should have distributed the money directly to the benficiaries.

    I don't disagree with you but in practice even assets which pass outside of the estate are usually managed by the Executor


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    #10
    ohnonotgmail
    Registered Users Posts: 40,321 ✭✭✭✭ohnonotgmail


    randomrb wrote: »
    I don't disagree with you but in practice even assets which pass outside of the estate are usually managed by the Executor

    insurance policies with defined beneficiaries are not assets of the deceased.


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    #11
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,691 Mod ✭✭✭✭Henry Ford III


    Gizzy Ireland wrote: »
    Our deceased parent left an insurance policy for the children. The executor of the estate is one of the children and has not released any funds, stating that it went towards Estate fees. Is this correct/legal?

    Thank you.

    Might be.

    Ask the Executor for an account of their actions.


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    #12
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,691 Mod ✭✭✭✭Henry Ford III


    ohnonotgmail wrote: »
    insurance policies with defined beneficiaries are not assets of the deceased.

    Indeed but the beneficiaries are unlikely to have been the policy owners.


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    #13
    ohnonotgmail
    Registered Users Posts: 40,321 ✭✭✭✭ohnonotgmail


    Henry Ford III wrote: »
    Indeed but the beneficiaries are unlikely to have been the policy owners.

    i would imagine the beneficiaries of a standard life insurance policy being the policy owner are pretty close to 0.


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    #14
    Peregrinus
    Registered Users Posts: 26,275 ✭✭✭✭Peregrinus


    ohnonotgmail wrote: »
    i would imagine the beneficiaries of a standard life insurance policy being the policy owner are pretty close to 0.
    No. The owner of an insurance policy is the person who effects it, and who pays the premiums - in this case, the deceased.


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    #15
    ohnonotgmail
    Registered Users Posts: 40,321 ✭✭✭✭ohnonotgmail


    Peregrinus wrote: »
    No. The owner of an insurance policy is the person who effects it, and who pays the premiums - in this case, the deceased.

    Exactly. and that person is unlikely to be named as a beneficiary of said policy.


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    #16
    Peregrinus
    Registered Users Posts: 26,275 ✭✭✭✭Peregrinus


    ohnonotgmail wrote: »
    Exactly. and that person is unlikely to be named as a beneficiary of said policy.
    Actually, that's not uncommon. I insure my own life, naming myself as beneficiary; the result is that on my death the insurance proceeds form part of my estate and I can provide in my will for who is to get them. I can them change this from time to time as my capricious whims dictate, according to which of my relatives are in favour and which are not, without having to cancel and reissue the policy (which might be difficult, if my health has deteriorated).


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    #17
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,691 Mod ✭✭✭✭Henry Ford III


    Peregrinus wrote: »
    No. The owner of an insurance policy is the person who effects it, and who pays the premiums - in this case, the deceased.

    That's incorrect.

    The legal owner can be someone else - an example is a partnership assurance scheme where the life assured and person assured are different. As I already said that's rare.

    p.s. The policy could have been set up in trust for someone else too.


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