Is life insurance part of your estate plan? If not, you might want to consider this additional form of protection and coverage. Your estate planning attorney can help you determine where this fits into your overall Michigan estate plan.
After you have selected a life insurance policy to help support your loved ones after you pass away, you need to choose what is known as a beneficiary. Your beneficiary is someone who is named outside of your estate on the life insurance policy itself to receive your assets. This can be split between multiple people. For example, you may award 80% of your policy to your spouse and 20% to your children.
Beneficiary designation forms need to be filed with the life insurance company directly and will be used by this company rather than any other document or estate planning tool to determine who receives what when you pass away. You need to be certain that the beneficiaries listed are the people you wish to receive your assets and continue to keep this updated as circumstances in your life change, if applicable. Bear in mind that there are two different levels of beneficiaries on life insurance policies; primary and contingent. Primary beneficiaries are those who are your first choice to receive the funds in a life insurance policy if you pass away.
However, if the primary beneficiary passes away before you do, the funds will then transfer to the contingent beneficiary. Contact your life insurance company directly for a version of their life insurance beneficiary designation form so that you can confirm you have filled this out accurately. You can also contact the customer service department at your life insurance company at any point in time to learn more about who is listed on your policy.