|
The
answer is almost always no. As long as
the life insurance policy has named beneficiaries (other than the estate) it is
not subject to probate in Tennessee and passes outside of probate. (for a
discussion on other assets that are no probate assets read this article here). Most often, the named beneficiaries simply
need to fill out some forms that the life insurance company has and the money
will be distributed rather quickly. This
payment is not subject to creditors of the person who died (See T.C.A.
§ 56-7-201).
T.C.A.
§ 56-7-201 also provides that even if the estate is listed as a beneficiary
of the life insurance policy, the money is still not subject to the debts of
the decedent unless specifically stated in the will. The entire text of T.C.A.
§ 56-7-201 provides as follows: On the death of an insured, any life insurance
acquired by the insured or the insured's spouse and payable to the intestate
insured's estate benefits the surviving spouse and children and the proceeds
shall be divided between them according to the statutes of distribution without
being in any manner subject to the debts of the decedent. If the proceeds of
the insurance are payable to the estate of a testate decedent or the trustee of
a revocable trust of which the decedent was a settlor, the proceeds shall pass
as part of the estate or trust and under the dispositive provisions of the will
or trust agreement, as ordinary cash, whether or not the will or trust
agreement uses any apt or express words referring to the insurance proceeds,
but the proceeds shall not be subject to the debts of the decedent unless
specifically charged with the debts in the will or trust agreement.
As
a result, even naming the estate as a beneficiary in your life insurance policy
does not have all of the potentially negative baggage for other probate assets.
In fact, there is a good argument that doing
so can be a good decision in certain circumstances. You would need to consult with an experienced
Tennessee estate planning attorney to discuss your specific circumstance
more. For a
listing of assets that are probate assets, read this article here.
Follow me on Twitter at @jasonalee for updates from the
Tennessee Wills and Estates blog.
|