The preparation of a beneficiary designation clause in a life insurance policy is important. If no beneficiary is designated, the policy proceeds many end up going into a decedent’s estate and being distributed to unintended beneficiaries. Sometimes, the life insurance contract terms may provide that if there is no named beneficiary, the proceeds are paid to certain surviving members of a decedent’s family such as a spouse or children. While this may appear reasonable, such payment does not always reflect a person’s intent. A Utah life insurance beneficiary lawyer can make sure that your intent is conveyed clearly.
When a life insurance policy is purchased, it is important to understand the type of policy that is obtained. The simplest type of life insurance is called “term” insurance. The premium that is paid buys a certain amount of insurance, say $700,000, and the policy continues in force for a definite term, say one-year. If the insurance is not renewed, there is no remaining value and the policy comes to an end.
“Whole life” type insurance is different because when someone pays the premium, the policy retains some value like a savings account. In these policies it is possible to fully pay for the value of the insurance over time and then not to have to continuously pay once the policy is fully paid. The insurance coverage continues until death and no further payments need to be made.
There are a number of different life insurance products and an experienced insurance professional can assist with understanding the various costs and benefits. Life insurance can provide a means to increase the value of an estate and also provide a source of liquid funds to pay after death obligations such as estate tax. The use of life insurance trusts has been a popular estate planning consideration. Since life insurance proceeds can be very large and valuable it is important to insert a beneficiary’s correct name and provide for an alternate beneficiary to insure that the proper individuals will receive the life insurance proceeds. A life insurance beneficiary lawyer can help Utah residents name alternate beneficiaries as needed.
Problems can arise when a person buys life insurance and many years pass and the beneficiary designation is forgotten. For example, a person may designate a parent as a beneficiary at a time when the person is not married. However, years later after the person is married and has children, the parent may not be the intended primary beneficiary. Moreover, the designation of the parent could be detrimental if the parent has his own large estate that may incur estate taxes.
The beneficiary designations should always be reviewed and up-dated to account for any changes and to make certain that the designations are consistent with an over-all estate plan.
Executor in a Will
Doing a good job as an executor requires someone with persistence and who pays attention to detail. However, most people need professional assistance as an executor in a will since each estate confronts many issues such as the collection and valuation of assets, the payment of debts, claims and taxes and the distribution of estate funds to beneficiaries.
An Executor is also known as a fiduciary and he has duties, responsibilities and powers that must be exercised properly. The Utah Probate Code, as well as decisions of the Federal Courts, Utah Court of Appeals and Utah Supreme Court, provide a wide array of conduct that an Executor (now called a personal representative), as a Fiduciary, must follow. For example, an Executor should pay all of the debts, taxes and obligations that a decedent and the decedent’s estate may be obligated to satisfy. Executors also have a general duty to treat all of the estate beneficiaries fairly and cannot engage in conduct which improperly favors one over another. Also, a fiduciary cannot engage in self-dealing which means that he cannot handle estate affairs in a manner that would wrongfully benefit himself over the interests of the estate and its beneficiaries. An attorney can help an executor make sure that they uphold this duty.
A Utah lawyer can guide an appointed executor to recognize and to perform his obligations as required by the Surrogate’s Court and related laws. When an Executor acts improperly he may breach his fiduciary duty and can be held accountable for his conduct. The Court has the power to remove an Executor and revoke his powers and also may require him to pay damages for wrongful acts. These damages are referred to as a surcharge. A breach of fiduciary duty may occur either because the fiduciary acts in a certain manner or is negligent in performing his duties. The code lists many of the powers that are given to Fiduciaries such as the power to invest estate or trust property and to pay proper expenses. Estate beneficiaries have a right to review the actions of all fiduciaries since it is required that beneficiaries be provided with an account of all of the estate or trust transactions.
As can be seen, acting as a fiduciary such as an Executor is a large responsibility. As noted, all fiduciaries are held accountable for their performance and also must provide the estate beneficiaries with a written accounting of the acts and transactions that they engage in, these accountings can be the subject of a separate Accounting Proceeding in the Probate Court.
Free Consultation with a Utah Life Insurance Beneficiary Lawyer
If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506