Life Insurance Policy paid to a spouse is it part of the Estate?

bellyboy996

Hello, my dad had a stroke on the 6th of dec, he passed away on the 7th, he had a Aviva life insurance policy, when i claimed it the lady said is it still to be paid to the next of kin, my mother, i said yes, my dad died with about £10,000 of debt with lloyds bankm the policy wasnt left to the estate, or in a trust it was to be paid to my mother, so does this money count as part of the estate? I dont think it does as money paid to another person wasnt my dads money, so would i be correct telling lloyds there are no property, or assests and the estate is nothing, which it is, there was no will, but aviva were adamant they would only pay the policy to my mother. I've never delt with anything like this before so any advice would be most welcome.

dunstonh

so does this money count as part of the estate?

The answer is depends.

If the policy was single life with your das as the owner, then the money is treated as part of the estate.

If the policy was single life or joint life but joint owner with your mum, then the money goes to your mum and is not included in the estate.

If the policy was in trust, then it is paid to the beneficiary named and not part of the estate.

 I dont think it does as money paid to another person wasnt my dads money

Just because it was paid to your mum, does not mean it is not part of the estate. If you mum is acting as executor and she is the only beneficiary of the estate then it would be normal to pay it to her.   However, in reality, it would offset the £10,000 debt with Lloyds.   The insurer would not pay direct to the lender.   They would expect your mum to do that.

so would i be correct telling lloyds there are no property, or assests and the estate is nothing, which it is, there was no will, but aviva were adamant they would only pay the policy to my mother.

It would depend on the answer to how it was set up.  i.e. if joint ownership or in trust it would be correct.  However, if it was a single owner policy (your dad) and not in trust then your mum would be committing fraud by telling Lloyds there is nothing.

bellyboy996

Thank you for for responding, i can assure you nobody will be comitting fraud, if its part of it, it will be paid. The policy is very bare bones on paper, it just covered my dad, and when i claimed it, the lady had all my mums details as she confirmed it was to be paid to her so i assumed she was the beneficiary as i didnt tell them anything they had all her details. Im not offically an executor, there is no will, but im dealing with all this as i say apart from lloyds debt there isnt anything to sort, just the DWP were informed to stop his benefits, pension services were informed too, he had nothing to his name in terms of assets no property, no sellable items, no car, he lived with me so didnt need anything like that. Thank you for you advice and time.

Sandtree

Then sounds like you need to go back to the insurers to ask if the policy was written in trust etc to get the answer to if its part of the estate or not.

Keep_pedalling

It does sound like it falls outside the estate you are usually required to obtain probate if a policy is paid to the estate. Once the insurance company have confirmed this, write to Lloyds informing them that your father has died (include a copy of his death certificate), that his estate is insolvent and that no one is administering the estate. 

dunstonh

It does sound like it falls outside the estate you are usually required to obtain probate if a policy is paid to the estate.

Unless the payout is small value and the claim is under the small estates threshold that allows it to be paid out without probate.  I suspect that is the case here. Albeit with limited info to be sure.  I cannot remember what Aviva's policy is or whether it is consistent across the different Aviva legacy companies.      Pru is fairly low at £30k but I had another (I think it was Standard Life) who had it at £70k.