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Help needed understanding 'Estate' please.

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?

Comments

  • Mark_d
    Mark_d Posts: 2,506 Forumite
    1,000 Posts Second Anniversary Name Dropper
    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 process
  • Hebrews12
    Hebrews12 Posts: 141 Forumite
    Ninth Anniversary 10 Posts
    Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?
  • MyRealNameToo
    MyRealNameToo Posts: 1,033 Forumite
    1,000 Posts Name Dropper
    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.  
  • Tree_pipe99
    Tree_pipe99 Posts: 5 Forumite
    First Post
    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.
  • MyRealNameToo
    MyRealNameToo Posts: 1,033 Forumite
    1,000 Posts Name Dropper
    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.
    The OP also has a first death joint life but is asking what happens upon a simultaneous death 
  • p00hsticks
    p00hsticks Posts: 14,502 Forumite
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    Hebrews12 said:
    Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?
    It's the job of whoever you have named in your will as executor of your estate to track down all the items that should go into it and all the debts that should be paid out of it.  It would be extremely helpful to your executors to keep a record of what savings / investments / insurance policies etc you have and with what companies, and also things like who your utilities are with etc, as the executor would need to contact all of these after your death. 
  • Brie
    Brie Posts: 14,953 Ambassador
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    Hebrews12 said:
    Thanks but I'm wondering how the Life Insurance money ends up in my 'estate'?
    It's the job of whoever you have named in your will as executor of your estate to track down all the items that should go into it and all the debts that should be paid out of it.  It would be extremely helpful to your executors to keep a record of what savings / investments / insurance policies etc you have and with what companies, and also things like who your utilities are with etc, as the executor would need to contact all of these after your death. 
    While I agree with most of what this poster states I frankly wouldn't bother listing things that are normal standard bills like utilities given that so many of us change them on a regular basis.  Better to ensure there's an up to date list available somewhere with your bank details so that the executor can look at a bank statement and see what the current payment arrangements are.  
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  • user1977
    user1977 Posts: 18,049 Forumite
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    Hebrews12 said:

    We have a will which leaves the house to the children 
    Presumably your will deals with the rest of your estate as well?
  • poseidon1
    poseidon1 Posts: 1,544 Forumite
    1,000 Posts Second Anniversary Name Dropper
    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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