Q: I am the beneficiary on the Life insurance policies and a total control account for my mother that I cared for 10 years. Not much, but she had them. Are these policies part of the estate now or do they belong to me and my family I would like to enter them into an account for my children. My siblings only came around when they needed to and were present the last two months of my mother’s life. Other than that, I took care of my mom, for the 10 years since my father passed. I would rather have my mom here and the money is not important to me, but under the circumstances, my brothers are wanting whatever they can get at this point. Please advise. (Pittsburgh, PA)
A: You should sit down with a probate attorney to have the documents looked at. I can only give you general information. Insurance policies with living beneficiaries, pass directly to the beneficiary upon the death of the owner or the insured. There is no inheritance tax owed on them under PA law. When I last handled a Met Life “Total Control” account, it was just like a bank account with a beneficiary, like TOD, or in-trust-for account. The account will pass to you directly and inheritance tax will be owed. If you only inherited the insurance policy and the Total Control account, there is no need to open an estate. You don’t have to tell your siblings anything, except that there was nothing for them to inherit. If they are curious enough, they can search the Register of Wills and find that no estate has been opened or check the Department of Revenue to look up the inheritance tax return once it is filed.
Q: My Aunt passed away in January. Her husband passed many years ago. She gave me keys to her home. Years later she had me sign a paper making me a beneficiary on her insurance. 5 yrs ago I noticed signs of dementia. My cousin also spoke regularly with my aunt and worked for a wealthy family and went to prison for embezzlement. She married the son of a funeral home owner, that was accused of stealing from clients. He moved his family to the south. When my cousin got out she joined him. After his father passed they relocated back here and he took over. I used my aunts key 1 time when my daughter and I went in to clean up after her dog and bathroom before she came home from the hospital. My cousin manipulated her and accused me of stealing papers from the house. I had helped my aunt with a bankruptcy and didn’t need to steal. They disposed of everything she owned and put her in a nursing home where I would visit her. After she passed they called me to say I need to come sign papers to get a check. I told them I needed a lawyer to look at them. They didn’t look right so I called the insurance co, filled out the claim form, and no assignment papers. I asked for a check to me. (Valencia, PA)
A: What is the question? If in fact you are the beneficiary of an active insurance policy, generally, all you need to do is fill out their claim form and any other forms they want such as a death certificate and copy of your ID. You should then receive a check. I have no idea why the insurance company wanted you to come in. Perhaps they want you to sign the insurance proceeds over to them to pay for the funeral. If the policy is payable to you only, you have no obligation to do so. If your aunt assigned the policy to the funeral home, that is another matter. PA does have a filial law statute whereby certain next of kin are obligated to pay for medical debt of the indigent but let them explain how that applies to you.
Q: I am the named beneficiary and I inherited my friend’s life insurance and 401k. The estate administrator is requesting I provide him with information regarding those accounts/policies so that he can add them to the estate accounting list. Am I required to provide him with that information? (Bethel Park, PA)
A: If you are listed as a beneficiary, neither asset is considered part of the estate as they pass outside the estate directly to you. The insurance policy is not subject to inheritance tax, but the 401 K may be. If the decedent’s will states that the estate pays inheritance tax on all assets, including those that pass outside the estate, then the attorney may need the information on the 401 K in order to prepare the estate inheritance tax return. If the estate is paying inheritance tax on an asset for which you are beneficiary, that is to your benefit. Therefore, unless the estate is obligated to pay the inheritance tax, I would think the attorney does not need them. These are not required to be listed on the Inventory. Perhaps the attorney just want to confirm exactly what type of asset they are. In my practice, I would rather actually see financial statements for the decedent’s assets than to take an heir’s word that they are not part of the estate and therefore nothing for me to be concerned with.