Does Insurance Money Get Processed Through Probate?

Does Insurance Money Get Processed Through Probate?

When someone close to you passes away, it can be very difficult to think about practical matters like settling that person’s estate.

There are bound to be many questions related to this process, especially when it comes to items like the deceased individual’s life insurance policy. One of the most common questions that people want to know relates to insurance and probate.  Probate is the procedure by which estates are settled following someone’s passing. Because probate is something you only encounter when someone dies, most people don’t really know how the process works.

Life insurance typically separate from probate

For the most part, any money paid out from insurance policies does not need to go through the probate process. Probate is meant to settle a deceased person’s estate, and insurance policies are not considered part of it. Instead, these policies are simply contracts one has with an insurance company that names a contractual beneficiary. Money from that policy will immediately go to the named beneficiaries and will never actually be a part of the estate, and so it is not subject to probate.

Occasionally, an insurance policy will not name a beneficiary — or the beneficiary will be a deceased person and the policy fails to name a contingent beneficiary. When this happens, the money becomes part of the estate and may be subject to probate. The insurance company would write a check to the administrator of the probate estate (called a personal representative in Florida), and the administrator would deduct any fees and debts of the decedent and distribute the remaining assets to the beneficiaries of the estate.

Probate can be a complex process and not all assets within an estate must be processed in this way. To learn more about your options, consult the experienced Florida probate administration attorneys at BaumannKangas Estate Law.