To understand the question—does the executor handle life insurance—you must first understand the role of the executor. In brief, the executor role relates to the probate estate.
Probate is the process of closing a deceased person’s estate. This includes things like paying debts and distributing assets according to a will or to the law. But there are things that are included in the probate process and things that are not. This means there are things that the executor must do as part of the probate process, and there are things that are not specifically part of the probate process and therefore not specifically part of the executor role.
Probate assets/probate property/the probate estate are those things the deceased person had that are allowed to be distributed in a will. An example of a probate asset is a car. You can give a car to your local public radio station in your will.
Non-probate assets cannot be distributed in a will. These are things the deceased person had and arranged for distribution through a legally acceptable means. Because an alternate means of distribution is recognized by the law, a will cannot be used to override or change the distribution. These non-probate assets are given to the beneficiaries outside of the probate process. A trust that the deceased person established during her life, for example, is a non-probate asset.
When you sign up for a life insurance policy, you are asked to list one or more beneficiaries for the policy. These beneficiaries are the people and/or organizations who will receive the life insurance money when you die. These beneficiaries can be modified during your life. A will cannot be used to change the beneficiaries listed in the policy. Life insurance is a non-probate asset.
When the person insured by the life insurance policy dies, the life insurance is distributed according to the beneficiaries listed in the policy.
As we’ve learned, an executor is responsible within the probate process. The executor’s responsibilities center around probate assets. But life insurance has a method of distributing to beneficiaries outside the probate process and is therefore considered a non-probate asset. Does the executor handle life insurance? The short answer is no. But it is not a bad idea for the executor to speak with the will’s beneficiaries to see if they have let the life insurance company know about the death. If they have not, the executor may, out of a sense of kindness and responsibility to the deceased, offer to make the notification so the insurance distribution process can begin.
Executor.org helps executors navigate their executor duties. Personalize your plan and learn about important questions like whether you should be compensated as an executor. With the right team helping you manage your executor duties, you can conquer the executor role.