Insurance

Life insurance jumps to mind when discussing death, but during the planning phase, you will need to address all other insurance: Home owner's/renter's insurance; liability insurance; auto, motorcycle, RV and boat insurance; and health insurance.

The proceeds of a life insurance policy do not become part of the deceased's estate, but rather are paid to the listed beneficiary. And, in many states, the spouse of the deceased is automatically the beneficiary, unless he/she has given written agreement otherwise. Whether it is a separate policy that you have paid for yourself or one that has been taken through your employer's benefits offering, remember to:

• Record the name of the insurance company, contact information, and the policy number(s)
• Keep the beneficiary current - have you divorced? Remarried? Has the current beneficiary pre-deceased you? Has another child been born or adopted?
• Provide contact details for the beneficiary and keep them current

I cannot reiterate how important this last point is. Before my friend passed, she made her ex-husband the beneficiary of one of her IRA accounts. The problem was that he had predeceased her by about 15 years, and the bank wanted a copy of his death certificate. He had a common name - along the lines of 'John Smith' - so looking for the information in the public records would have been a challenge. I was very lucky in that she had saved one copy of his death certificate with her insurance papers in her personal files. That death certificate saved the estate (and me) time, money and legal issues.

Speak to the insurance representative and explain the situation before any changes or transfers are made. They will be able to provide specific alternatives to address individual circumstances.

All assets, including real property and its contents, become part of the estate upon the owner's death. If you are living in a rental property, the rental property itself does not become part of the estate, but its contents do. And, in many metropolitan areas, the risk of theft and/or vandalism increases once the obituary is published.

For all of these reasons, the home owner's and rental property insurance need to be maintained until these assets have either been liquidated or distributed to the designated beneficiary to protect the assets.

This hold true for liability insurance, which is frequently included in both home owner and rental insurance. If the property is still being used by a family member after a person's death, there will continue to be visitors and deliveries, which opens the possibility and potential for injury and liability lawsuits.

As with life insurance, remember to apply the same discipline in your documentation of insurance policies for Home Owner's, Renter's,  and Liability insurance:

• Record the name of the insurance company, contact information, and the policy number(s)
• Check with the insurance agent or broker to see if they recommend any changes to the policies, based on the situation
• Keep this information up to date!

Also, for all of the insurance policies, speak with the lawyer to ensure that the estate will continue to pay the premiums during the period in which the estate is being settled. If possible, this should be included in the will.

If you are the only one covered under a specific health insurance policy, then you will need to contact the insurance provider, either directly or through your employer, to obtain information on how to cancel the coverage upon your death. 

However, check with the insurance agent or broker to see how any outstanding medical bills would be handled prior to cancelling the coverage. Leave this information in your death planning document. 

If there are dependents covered under the existing policy, you will need to contact the insurance provider and confirm what steps would need to be taken immediately once the primary policy holder has passed. Would the dependents still be covered, or would it be necessary to find another provider? This is especially critical for:

• Children under 18 years of age
• Special needs adult children
• Parents

We highly recommend that you discuss this with the insurance provider during the planning process to prepare for these types of special coverage.

Please:

• Discuss these scenarios with your providers as part of the planning process
• Record the name of the insurance company, contact information, and the policy number(s)
• Check with the insurance agent or broker to see how any outstanding medical bills will be handled prior to cancelling the coverage
• Keep this information up to date

Again, for all of the insurance policies, speak with the lawyer to ensure that the estate will continue to pay the premiums during the period in which the estate is being settled. If possible, this should be included in the will.

What is your full legal name?

Before death, the three most important documents are a Power of Attorney, a Healthcare Proxy, and a Living Will. 

But none are valid after your death

These are the critical elements of what you leave behind and your bequests

During your life circumstances change. Remember to update pre-planning documents and your final wishes periodically. 

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