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Help needed understanding 'Estate' please.

Hebrews12
Posts: 141 Forumite

Hi. My wife and I have a joint Life Insurance policy which would pay out to the the survivor should one of us die. If we were both to die, I need to ensure that the money would go to my children. I'm told that a payment would go to my 'estate' but I don't really know what that means. We have a will which leaves the house to the children but how would they get the Life Insurance? Would it be a case of them ringing up who we have the policy with and thehn they will take it from there?
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Your will determines how your estate is divided up when you die - your estate being everything you own - your house, cash, investments, car etc. The insurance payout will flow through the same process0
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Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?0
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Everything you own is your estate when you die, somethings are considered outside your estate though like any property you own on a joint tenancy basis.
Your estate is divided up according to your will or in the absence of a will in line with the rules of intestacy.
If it cannot be determined who died first the the law in England assumes the older person died first so the payout would go to the younger person and form part of their estate.0 -
You need to check your specific policy, but my joint life insurance pays out after the first one of us dies. There is no payout after the second one of dies.
So if I died first, my wife would be paid the amount stated in the policy, and she can do with it as she pleases e.g. put it in a high interest account, invest it or spend it. Whatever is left after that will be part of her 'estate' when she dies.0 -
Tree_pipe99 said:You need to check your specific policy, but my joint life insurance pays out after the first one of us dies. There is no payout after the second one of dies.
So if I died first, my wife would be paid the amount stated in the policy, and she can do with it as she pleases e.g. put it in a high interest account, invest it or spend it. Whatever is left after that will be part of her 'estate' when she dies.0 -
Hebrews12 said:Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?0
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p00hsticks said:Hebrews12 said:Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe, Old Style Money Saving and Pensions boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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Hebrews12 said:Hi. My wife and I have a joint Life Insurance policy which would pay out to the the survivor should one of us die. If we were both to die, I need to ensure that the money would go to my children. I'm told that a payment would go to my 'estate' but I don't really know what that means. We have a will which leaves the house to the children but how would they get the Life Insurance? Would it be a case of them ringing up who we have the policy with and thehn they will take it from there?
If you were to die together, legally the older of the two of you would be deemed to have died 1st.
Assuming your wife younger than you, on joint simultaneous death, your wife would inherit everything from you including the joint life policy proceeds.
Her estate ( house, cash, isas, policy proceeds etc) would then need to go through probate before your children can take control of what they inherit under her will.
Something to bear in mind, if your joint assets are already at or near the £1 million threshold before IHT arises, the policy proceeds could end up pushing your joint estate into IHT territory.
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