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Can Life Insurance be Part of Your Estate Planning

By Lane V. Erickson, Idaho Estate Planning Attorney

When most people think about estate planning, they think about documents such as a last will and testament, or a durable power of attorney, or trusts, living wills, and so forth. However, even though these documents create a basic estate plan, there are other things that also could and should be included as part of your estate planning. One of these is your life insurance.

At the Racine law office, our team of premier Idaho estate planning attorneys work to make sure that your estate-planning is customized to meet your specific needs. We also work to make sure your estate planning is complete. All of the attorneys on our team are experienced and qualified in helping each of our clients individually. Our team is made up of partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. Our attorneys have each earned the highest rankings possible based upon their experience, knowledge, abilities and ethics from the several notable legal rating services including AVVO, Martindale & Hubbell and Justia. More importantly, our team of attorneys have the skill and experience to help you.

So why is it that we say that life insurance is a part of your estate planning? The rest of this article will describe how life insurance works as part of your estate planning, how you control who receives your life insurance, and the importance of keeping your beneficiaries both identified and updated as part of your life insurance contract.

How Life Insurance Works

Most people understand how life insurance works. They understand that they can go to an insurance company and sign a contract for life insurance. This contract states that so long as the individual who is purchasing the life insurance makes the premium payments, whether those are annual or monthly, then, when they pass away the insurance company will pay a lump sum of money to whoever is identified on the contract as the beneficiary.

While these are the basics when it comes to life insurance there really are many different types and kinds of life insurance that a person could purchase. If you want life insurance to be a source of finances for your family or loved ones after you are gone, you simply need to make sure that you are purchasing the right kind of life insurance for you that will meet your needs and provide for your family and loved ones after you pass away. The type of life insurance that you purchased may be dependent upon your age, your financial circumstances, and who you want the life insurance to be paid to once you are gone.  

How You Control Who Receives Your Life Insurance

The next thing that you need to understand is how you control who receives your life insurance. Even though life insurance may be part of your estate-planning, you need to understand that life insurance is not part of your estate when you die. In other words, when you pass away, the life insurance proceeds are not paid to your estate. Rather, they are paid to whoever you have listed as a beneficiary in your life insurance contract.

If you have not filled out the beneficiary designation on your life insurance contract, then your estate actually does become the beneficiary. In other words, if you have no beneficiary listed or designated, then the life insurance company is required to pay the life insurance proceeds to your estate. When this happens, the life insurance then becomes an asset of your estate. Assets that belong to your estate will be controlled either by your own written last will and testament, or if you do not have a will then by the laws of intestacy.

Because you are a party to the life insurance contract, and because you are making the premium payments for the life insurance, you have a right to designate any person or entity that you want to be the beneficiary of your life insurance proceeds. You have a right to change your beneficiary designation whenever you want and as often as you want. The main thing is you want to make sure that you have named a beneficiary.

If you don’t know whether you have named the beneficiary, you can simply contact the life insurance company, ask them to provide you with a copy of your beneficiary designation form. They will provide this information to you. If you want to make a change, you simply ask the insurance company for a new designation of beneficiary form that you can fill out.

Keeping Your Beneficiary Listings Current  

Because you have the ability to change who the beneficiaries are on your life insurance policies, you simply want to check them regularly and make sure that the individuals that are listed as beneficiaries are really the people you want to receive the life insurance monies after you were gone. Life isn’t stagnant. Changes are happening in the lives of each of us. Whenever a major life change occurs, which would include someone being born, or someone dying, someone being married, or being divorced, or someone moving away this may affect who you want to list as a beneficiary on your life insurance policy. The advice we give to our clients is that if you have gone through a major life change, or if a significant period of time has gone by, you should review who you have listed as a beneficiary on your life insurance. By doing this, you can make sure that you have listed the individual(s) that you want to be your beneficiaries when you are gone.

If you have questions about how your life insurance is a part of your estate planning, or the changes that you might need to make to your life insurance cover we can help.

Enlist an Idaho Business Attorney to Help You

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho Estate Planning problems.

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