Joint life insurance, outside of estate?

mikeyboy

Hi, quick question...

We have joint life insurance which we took out a couple of years ago. Can you please clarify, if either of us die do the funds automatically get paid to the other person insured?

Also, do debts have to be paid using the pay out or would that decision be upto the surviving partner?i.e. does the insurance payout to the survivor fall outside the estate of the deceased.

Thanks

dunstonh

Can you please clarify, if either of us die do the funds automatically get paid to the other person insured?

Depends on how you set it up.

If its joint life, joint owner, first death and not in trust then its paid to the surviving policy owner. If its in trust it is paid to the beneficiary outside of the estate.

if either of us die do the funds automatically get paid to the other person insured?

No. It goes to the other policy owner unless in trust.

Also, do debts have to be paid using the pay out or would that decision be upto the surviving partner?i.e. does the insurance payout to the survivor fall outside the estate of the deceased.

The beneficiary can spend the money as they see fit.