Division of Life Insurance Policy

A.,

Okay, if I understand this correctly, you are trying to decide what to do with the ins payout should your entire family (children included) pass away. My husband and I have been through this several times, both before and after our son was born. Here's how it works for us; we both maintain seperate policies on ourselves, and the primary beneficiary on each is the guardian for our son. Should our son go with us, then my policy payout goes to my family and my husband's goes to his family. My son's policy currently doesn't have any one other than us listed, so I guess it would go to probate, but it's not a huge amount, so hopefully there won't be much fighting if something terrible happens.

Good Luck,

R.

A.,

I didn't get a chance to read all the other responses so I hope I am not repeating.

I think that the benefits from your policy should go to whom you want to if your children are not in the picture. The benefits from your husbands policy should go to whom he wishes.

Sounds to me like whoever will have your son should get the bulk. As far as the rest of the family goes..that's tuff. Guess it all depends on who contributed more/less to it. Whether or not any of the siblings helped with either of your education/career. If you are close to them equally. There are too many factors to make a simple suggestion. good luck

Dear A.,

Yes, yes, I have been in the same situation, only this is our second marriage each, and he has 4 daughters, with me only having two children. He insisted on the same thing that your husband is saying. I gave in, and I think that it is wrong , but it is done now, and I am just living with it. Life isn't fair, so remember that.

Also, as in my mother's and step father's case the same thing came up and it became moot at his death, because all the money was almost used up. Also, I think that my sister had forced them to change the will to be half and half. I stayed away from the whole thing. Anyway, no one suffered. We are still living and breathing and haven't missed a meal and we live in comfortable houses and have enough clothes and shoes.

I don't know why people are so short sighted, but they are, and they are the ones that complain and complain and whine too. Oh well, live peacefully and get on with your life. All will be well, and do forget about it.

Probably your whole family will not die at the same time anyway - or if you did the two families might just get together and help humanity with your money instead of spending it on themselves.

C. N.

Hi, A little about me real quick - I am a California Licensed Life Agent. Life Insurance can be real tricky. If in the scenario above you are talking about if you and your husband passed at the same time who would get the money. The best situation is to set up your children as sole beneficiary but then give financial control to whomever you wanted to raise your children. You can pretty right your life policy to be whatever you want, as simple or as strict as you desire. The way we have ours set is to make my sister the financial controller of what money my daughter would be receiving until she reached 24 or graduated from college whichever came first. Then she is alloted a certain amount on a 2 year basis. The other situation which I believe is what you are talking about (if your whole family passed at the same time) that I have set my policy up to go to my family the way I want it - Spread to my siblings and parents how I felt it should be and my fiance's goes to his siblings and parents in however he felt neccessary. We then set up our daughters policy to be spread equally amongst both families. If you want your portion of your policy to go soley to your sister you abosolutely need to make your policy that way. If you husband sees that as selfish then he may opt to have a higher policy than you so that he can spread more amongst his siblings. Really at the end of the day the main concern should be being able to cover any and all financial oblingations that you or your family have so that those are not passed on to living relatives as a hardship. The decision really needs to be what you feel is right. Is isnt easy trying to set up living wills or life policies so make sure that whomever you are dealing with really understands what your main goals are and executes them in the EXACT way you want. I hope this wasn't too much or too confusing and I am wishing you the best of luck. Please let me know if there are any questions you'd like some insight into.

I know you already received several responses on this but I think you should divide it half to your family, half to his. Then his siblings can split their half. I agree with your reasoning for this. Good luck :)

Our money and property, what their is of it :) go to the wards of our children. Who ever gets the kids get the money.

I have never had life insurance and have no history of major illness in my life........My suggestion would be to pray about it.........It gets very sticky money stuff comes up before and after the fact....... My bro and his wife had a history of cancer in her family for them it made good sense she just passed away at 51 but had already lost 2 sibs to cancer........

I think the question was, where should the money go if they entire family was gone. Come to think of it, we did not cover this scenario when we did our will. Oops.

I would divide it equally between the five siblings on both sides.

A.,

Although not exactly the same scenario, my husband and I get in the same "argument" every time we play the "What would we do if we won the lottery game?" Interestingly enough, it is the other way around.... I think that family members should all get the same amount (i.e. 10,000) He thinks that we should split half and half between our two family sides and then divide it. His family is much bigger than mine so everyone would get less than my side... Hmmmm.

Someone else responded to split half and half just like in court if it was the two of you, but I don't see it that way- for me it doesn't seem to be a my side/your side issue... It is an issue of sharing your estate with your loved ones who are all "equal".... I certainly realize that you can't have the same kind of close relationship with every sibling (his or yours) but if you're already dead then why leave more stress among your siblings by being unequal... money and wills are sure to cause problems no matter what so I say to level the playing field as much as possible so there are no hard feelings in your wake. You are already gone, so keep it as peaceful as possible! Certainly there will be special things that you can leave behind to individuals to show how you felt about them beyond the money... That said, this is a lot easier said than done, I'm sure. My husband and I have put "Make a Will" on our list of things to do, and I know we will have the same discussion!

Good luck!
K.

I would have agree with your husband, the money should be divided equally in order to make things fair, and prevent family fights if anything were to happen to your family.

Ultimately, the answer is going to come from a mutual agreement between you and your husband. It is all very difficult to imagine. Let alone plan. It's never simple, but to try to make it so, the 50/50 rule makes sense. That means halve to your designated beneficiary and to his.

Your insurance professional should be capable of planning a Trust or succession plan for your family in the event of a loss.

A plan for several scenarios should be created and included in your living will. You can appoint a trustee as a beneficiary, who then implements your succession plan. The trustee is usually a trusted financial advisor, financial firm or law firm attorney.

Good luck with this. I have a great long term insurance pro that I work with in California. There are wonderful ones in every state.

100% to YOUR CHILDREN, and their guardians made executors of what's needed to care for them. In the event of death of the entire family, half to your side and half to his: just as the law would divide it if you were intestate.

Life insurance is typically supposed to cover the expenses of life without you. So, I would say the entire amount should go to the guardianship of your child. As it was explained to me and my husband, your death is not supposed to be a windfall for your family. I understand the desire to leave something to loved ones, but you are not responsible for their financial well-being while you are alive, are you? Your son is the one you need to take care of. I'm sure the rest of your family will understand that. Any assets you have in addition to the life insurance could be divided between them (theoretically)without diminishing the quality of life for your child. As a mom, I know your son is your whole world and you are his. With your death, his world would be completely destroyed. I think you should leave him every means possible for him to rebuild a little of it.

We had to do this. We stated that whomever was at the top of our list for taking care of our child would have our insurance money/assets. Strange to think about, huh?

Jen