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I had a client come in last week and said “I am trying to change the beneficiary of an insurance policy that my dad owned for my handicapped brother. My dad passed away several months ago and the insurance company is telling me that I need a small estate affidavit. We didn’t need probate for Dad, why would I need something now from probate court?”

It is so important to consider when you purchase an insurance policy, who not only owns the policy but who the beneficiaries are. In this situation, the owner of the policy died so therefore nothing can be changed until the ownership of the policy is changed. Since the owner is deceased, probate court needs to approve the transfer to the new owner. Let’s think about this. How does the insurance company know who the beneficiaries are? It is why probate was created. To ensure that the proper parties receive what they are entitled to from the decedent.

It is why it has become so important to create not just documents but a plan. A plan involves making sure that there are contingencies in place in case the owner passes away. Documents don’t allow for that. So having a trust or will doesn’t matter. What matters is you create a trust that it is funded properly. If you create a will. it is important to make sure the account ownership and beneficiary designation are properly created. We see this time and time again in our office. It’s time for you to come in and make sure that you have a plan and not just documents.

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