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Life Insurance Can Help Keep The Peace In Blended Families, But Only If You Let It


If you have ever bought life insurance, or even looked for it online and wanted to buy it, then congratulations, you are officially old.  Even if you are not old enough to remember a time when people bought insurance from door-to-door salesmen who gabbed like John Goodman’s character in Barton Fink, you are old enough to know what is really important in life.  You know that your family would rather have you with them than anything that money can buy, but getting a life insurance payout shows them that you cared enough to ensure that you could give them financial stability after you were gone.  In fact, life insurance is one of the few legal ways to give people money that never belonged to you.  If you own a life insurance policy, you are already well on your way to providing for your family in the long-term.  A Central Florida estate planning lawyer can help you fill in the other details.

The Poor Man’s Trust Fund

The younger you are when you take out a life insurance policy, the less it costs.  For less than the cost of a gym membership, you can buy several life insurance policies, enough to provide each of your close relatives with a generous sum at some point which, one can hope, will be in the distant future.  You can even specify contingent beneficiaries, so that if the original beneficiary (for example, your spouse) predeceases you, the contingent beneficiary (such as your child) will get the money.  Some divorce decrees order the wealthier spouse to carry life insurance with the minor children as beneficiaries.  The purpose of this practice is to ensure that the children have financial support if the parent dies before the children reach adulthood, but if you keep the life insurance policies even after the children grow up, then you are adding to their inheritance.  Of course, if you don’t list a beneficiary, then the insurance company will act as if you are your own beneficiary, and the payout will become part of your estate, to be distributed along with all the other probate assets.

If you leave most of your estate to one family member, life insurance policies with other family members as beneficiaries can prevent the disinherited (or, perhaps, inheritance-poor) from feeling that they are going away empty-handed.  In fact, if you remarry, then those life insurance policies you bought for your children’s benefit when you divorced their mother can prevent resentment if their stepmother is the main beneficiary in your will.  This is what Rafael intended to do; he left his estate to his wife, while his children from his first marriage remained the beneficiaries of life insurance policies he had taken out decades earlier.  The trouble is that he did not list a beneficiary on one of the policies, and his wife and children fought over that policy during probate.

Let Us Help You Today

Your Clearwater estate planning lawyer can help you make an estate plan that reflects your pragmatic, no-frills financial values.  Contact William Rambaum for a consultation.



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