What are you supposed to use life insurance for?

[cricketwife]

Mar 6, 2023 20:27:03 GMT -5 ProfessorArtNerd said:

Mar 6, 2023 20:08:09 GMT -5 tacokick said:

Unless she and her sister were co-owners of the account with their aunt or listed as payable on death beneficiaries at the bank on the accounts they most likely wouldn’t get any money until the estate is settled. Even if there is money is in the account and in the will it says they will get it.

It would be part of her probate estate and you have to prove there are no debts, everyone’s been notified of the death (including the public which can take six or more months) etc before you can start cutting checks to beneficiaries. Or funeral homes (depending on state/local laws) since funerals are not considered debts of the estate.

That’s one reason why people have life insurance, it normally pays out right away.

Yes yes, exactly, this is the problem. We will split the money from the sale of the house, but our probate appointment isn’t even til tomorrow. The funeral was in January. We can’t access her money in the bank, we can’t use her credit card (if we could even find it, another issue entirely). She lived in NJ, which has weird, strict laws about estates and probate, especially when the beneficiaries aren’t a spouse or child. Extra hoops and all that.

I didn’t know how much the life insurance was going to be, but we expected to be able to use it to cover the very modest funeral we planned (we, being my sister and I). And not to be tacky, but I don’t think a lot of you would be all “oh well, what’s $xx,000 each, we will eventually get half a house”.

Ok, I didn’t realize how far out you were from her death and funeral.  I thought you may still be in the territory of “sister hasn’t notified bank of death and has access to her accounts territory.”  I do understand how probate works. My stepfathers funeral was very close to his death (as was the payment for it) and we did not yet have legal recognition of My POA for my mother,  but I had her bank cards, knew the PIN, etc.  I have had to do a lot “through the back door.” 

As far as a solution, perhaps you could work with the aunt who seems reasonable to see if she could loan you the money to cover the expenses while you wait for the estate to settle. 

[quesyrah]

Mar 6, 2023 20:27:03 GMT -5 ProfessorArtNerd said:

Mar 6, 2023 20:08:09 GMT -5 tacokick said:

Unless she and her sister were co-owners of the account with their aunt or listed as payable on death beneficiaries at the bank on the accounts they most likely wouldn’t get any money until the estate is settled. Even if there is money is in the account and in the will it says they will get it.

It would be part of her probate estate and you have to prove there are no debts, everyone’s been notified of the death (including the public which can take six or more months) etc before you can start cutting checks to beneficiaries. Or funeral homes (depending on state/local laws) since funerals are not considered debts of the estate.

That’s one reason why people have life insurance, it normally pays out right away.

Yes yes, exactly, this is the problem. We will split the money from the sale of the house, but our probate appointment isn’t even til tomorrow. The funeral was in January. We can’t access her money in the bank, we can’t use her credit card (if we could even find it, another issue entirely). She lived in NJ, which has weird, strict laws about estates and probate, especially when the beneficiaries aren’t a spouse or child. Extra hoops and all that.

I didn’t know how much the life insurance was going to be, but we expected to be able to use it to cover the very modest funeral we planned (we, being my sister and I). And not to be tacky, but I don’t think a lot of you would be all “oh well, what’s $xx,000 each, we will eventually get half a house”.

There is nothing that can be down now, but it honestly sounds like the main issue is that a funeral was planned without regard to how it was going to be paid for.

To be clear, I’m not trying to blame you, but it doesn’t sound like there was a discussion of where payment would come from until after it was planned and the funeral home wanted payment?

If I understand right, there were just assumptions made about what and whose money would cover the funeral.

So it really isn’t your obligation to pay for it.

[tacokick]

Mar 6, 2023 20:26:07 GMT -5 flygirl said:

An estate doesn’t have to be finalized in order to pay out funeral expenses. When you get confirmed as the executors, and get an estate account set up you can write a check to the funeral home. I am an executor for an estate and got everything done in about 75 days and the funeral home was fine holding a deposit until then. Like another poster said, if your one aunt is kind enough to lend you the money now, you can pay her back once the estate account is open.

It really can vary wildly by regional laws. In Maryland where I was the executor, the fastest you can do is six months and that’s only if everyone named in the will and/or closely related to the deceased and a judge agrees you can fast track it. And nothing goes wrong or gets held up. There are also limits to how much you can use towards a funeral. I wish it only took 75 days!

[jinkies]

I think she was saying that the estate account was set up within 75 days, not that the whole estate was settled.

I'm guessing that maybe NJ must work differently than PA? In PA, it should work the way flygirl explained. The executor sets up an estate account and pays out estate-related expenses through that account until the estate is settled. Funeral expenses would be an allowable expense to be paid out of the estate.

But I have no experience with NJ and it sounds like it may vary quite a bit state to state.

I'm sorry this is so complicated.

[gretchenindisguise]

Mar 6, 2023 20:41:56 GMT -5 quesyrah said:

Mar 6, 2023 20:27:03 GMT -5 ProfessorArtNerd said:

Yes yes, exactly, this is the problem. We will split the money from the sale of the house, but our probate appointment isn’t even til tomorrow. The funeral was in January. We can’t access her money in the bank, we can’t use her credit card (if we could even find it, another issue entirely). She lived in NJ, which has weird, strict laws about estates and probate, especially when the beneficiaries aren’t a spouse or child. Extra hoops and all that.

I didn’t know how much the life insurance was going to be, but we expected to be able to use it to cover the very modest funeral we planned (we, being my sister and I). And not to be tacky, but I don’t think a lot of you would be all “oh well, what’s $xx,000 each, we will eventually get half a house”.

There is nothing that can be down now, but it honestly sounds like the main issue is that a funeral was planned without regard to how it was going to be paid for.

To be clear, I’m not trying to blame you, but it doesn’t sound like there was a discussion of where payment would come from until after it was planned and the funeral home wanted payment?

If I understand right, there were just assumptions made about what and whose money would cover the funeral.

So it really isn’t your obligation to pay for it.

I don’t think that’s right. They planned to have the funeral paid with life insurance money. Then they found out after it was all said and done that life insurance wasn’t coming to them, it was going to dad/aunt.

[polarbearfans]

So… even if they pay from the life insurance money, they may be able to make a claim against the estate, so it would be no different than how it is happening now. In my state I became first in line to be reimbursed from the estate because I paid for the funeral.

[ProfessorArtNerd]

Mar 6, 2023 21:26:14 GMT -5 gretchenindisguise said:

Mar 6, 2023 20:41:56 GMT -5 quesyrah said:

There is nothing that can be down now, but it honestly sounds like the main issue is that a funeral was planned without regard to how it was going to be paid for.

To be clear, I’m not trying to blame you, but it doesn’t sound like there was a discussion of where payment would come from until after it was planned and the funeral home wanted payment?

If I understand right, there were just assumptions made about what and whose money would cover the funeral.

So it really isn’t your obligation to pay for it.

I don’t think that’s right. They planned to have the funeral paid with life insurance money. Then they found out after it was all said and done that life insurance wasn’t coming to them, it was going to dad/aunt.

Right, exactly.  We were actually told that the life insurance could be used to pay this expense.  It was a foregone, but unfortunately for us, incorrect assumption that my aunt had insurance to pay for this expense. 

[ProfessorArtNerd]

Mar 6, 2023 21:31:14 GMT -5 polarbearfans said:

So… even if they pay from the life insurance money, they may be able to make a claim against the estate, so it would be no different than how it is happening now. In my state I became first in line to be reimbursed from the estate because I paid for the funeral.

That would be preferable to the funeral home coming after us, though.  I just want to get them paid, since it's in mine and my sister's names. 

[minzy]

I’m sorry you’re stressed about this, OP. The death of one of my aunts who died two months ago today is bringing out some unflattering bits in my family, too. Your post is timely since I literally just this morning opened an estate bank account. We had to wait for the death certificate before we could file to open probate, and then there was more waiting for my out-of-state letters of appointment, and that allowed the lawyer to request an EIN so I could open the probate bank account. Luckily in our case my aunt added me to her regular bank accounts last fall, and she had about $25,000.00 across them, so I was able to pay for her funeral, reception, headstone, grave opening fee, liner, property taxes, insurance, ongoing utilities for the house, jewelry appraisal, some funeral travel costs, and what feels like a lot of other things. Once that runs out (pretty soon), I believe I am on the hook to front any costs until we transfer title/sell the house and probate closes (6 months minimum in Ohio also). Another relative is contemplating buying the rest of us out on the house, but seems to want to take her time… I am trying to pressure her to move on it, not because I am concerned about the money, but because I want to do it right and also wrap up the obligation. My aunt’s case is really pretty simple and even still is basically a part-time job.

[ProfessorArtNerd]

Mar 6, 2023 21:46:47 GMT -5 minzy said:

I’m sorry you’re stressed about this, OP. The death of one of my aunts who died two months ago today is bringing out some unflattering bits in my family, too. Your post is timely since I literally just this morning opened an estate bank account. We had to wait for the death certificate before we could file to open probate, and then there was more waiting for my out-of-state letters of appointment, and that allowed the lawyer to request an EIN so I could open the probate bank account. Luckily in our case my aunt added me to her regular bank accounts last fall, and she had about $25,000.00 across them, so I was able to pay for her funeral, reception, headstone, grave opening fee, liner, property taxes, insurance, ongoing utilities for the house, jewelry appraisal, some funeral travel costs, and what feels like a lot of other things. Once that runs out (pretty soon), I believe I am on the hook to front any costs until we transfer title/sell the house and probate closes (6 months minimum in Ohio also). Another relative is contemplating buying the rest of us out on the house, but seems to want to take her time… I am trying to pressure her to move on it, not because I am concerned about the money, but because I want to do it right and also wrap up the obligation. My aunt’s case is really pretty simple and even still is basically a part-time job.

The financial advisor who handled my aunt's finances told me it's as intricate as starting a business.  And my sister works overnights, so i'm trying to help as best as I can.

[cville]

Legally, it's a direct benefit to the beneficiaries to be used on literally anything they want.

Morally(?), "should" it go to help with funeral and other death-relared expenses rather than to estranged relatives, absolutely.

People often act in ways that are so disappointing and surprising (or unsurprisingly disappointing) when it comes to death and money. I'm sorry.

[konapoppy]

No advice, I’m just really sorry you are dealing with this. It’s incredibly frustrating that those with the available liquid assets won’t/can’t help bridge the gap here.

[minzy]

Mar 6, 2023 22:04:03 GMT -5 ProfessorArtNerd said:

Mar 6, 2023 21:46:47 GMT -5 minzy said:

I’m sorry you’re stressed about this, OP. The death of one of my aunts who died two months ago today is bringing out some unflattering bits in my family, too. Your post is timely since I literally just this morning opened an estate bank account. We had to wait for the death certificate before we could file to open probate, and then there was more waiting for my out-of-state letters of appointment, and that allowed the lawyer to request an EIN so I could open the probate bank account. Luckily in our case my aunt added me to her regular bank accounts last fall, and she had about $25,000.00 across them, so I was able to pay for her funeral, reception, headstone, grave opening fee, liner, property taxes, insurance, ongoing utilities for the house, jewelry appraisal, some funeral travel costs, and what feels like a lot of other things. Once that runs out (pretty soon), I believe I am on the hook to front any costs until we transfer title/sell the house and probate closes (6 months minimum in Ohio also). Another relative is contemplating buying the rest of us out on the house, but seems to want to take her time… I am trying to pressure her to move on it, not because I am concerned about the money, but because I want to do it right and also wrap up the obligation. My aunt’s case is really pretty simple and even still is basically a part-time job.

The financial advisor who handled my aunt's finances told me it's as intricate as starting a business.  And my sister works overnights, so i'm trying to help as best as I can.

It really is! I have learned a ton these last two months, about all sorts of things. I’m basically considering it like a trial run for the eventual day I will have to deal with my father’s, which will be significantly more complicated in every way. :/ That’s good that your sister and you have each other. My sister has been a big help to me with logistics, too.

[quesyrah]

Mar 6, 2023 21:40:36 GMT -5 ProfessorArtNerd said:

Mar 6, 2023 21:26:14 GMT -5 gretchenindisguise said:

I don’t think that’s right. They planned to have the funeral paid with life insurance money. Then they found out after it was all said and done that life insurance wasn’t coming to them, it was going to dad/aunt.

Right, exactly.  We were actually told that the life insurance could be used to pay this expense.  It was a foregone, but unfortunately for us, incorrect assumption that my aunt had insurance to pay for this expense. 

Oh I see. I missed that, I’m sorry. I didn’t realize you had been told that the life insurance was intended for the funeral. Sorry.

[mysteriouswife]

Mar 6, 2023 22:15:53 GMT -5 minzy said:

Mar 6, 2023 22:04:03 GMT -5 ProfessorArtNerd said:

The financial advisor who handled my aunt's finances told me it's as intricate as starting a business.  And my sister works overnights, so i'm trying to help as best as I can.

It really is! I have learned a ton these last two months, about all sorts of things. I’m basically considering it like a trial run for the eventual day I will have to deal with my father’s, which will be significantly more complicated in every way. :/ That’s good that your sister and you have each other. My sister has been a big help to me with logistics, too.

I too am following these post closely. I told H we need to play to pay upfront for my relative or I need to have a discussion about pre planning with them

[cleo29]

ProfessorArtNerd, I'm so sorry that they are not being better about this. Frankly, I think it is even worse they are not willing to use money, they had no clue they would be getting, towards her funeral.

I think, perhaps if you are not able to talk them around, ask that they each pay half of the expenses from the life insurance money and you and your sister will pay them back when the estate is settled.

I am so sorry.

[sparkythelawyer]

OP, they're jackholes. I hope their pillow is warm and their sheets bunch up at their feet every night

[maudefindlay]

Would they go in a quarter? That way all 4 of you are contributing and might be an easier pill to swallow for all. If not maybe tell yourself you will inherit it one day (assuming you are in their will).

[shauni27]

Mar 6, 2023 18:06:41 GMT -5 mags said:

Mar 6, 2023 16:56:40 GMT -5 VillainV said:

It really depends, but $10k is probably a better number. You probably COULD do it for $5k, especially if the decedent chooses to be cremated, and if the plot is already paid for.

We spent about 10,000 last year for my dad all in and he was cremated. 

that is wild to me. When my dad died in 2021 we cremated him and scattered his ashes where he wanted. I think the total cost was $1500 to the funeral home (which to be fair might not be a real funeral home, I think they JUST do cremations.)

We did a virtual memorial (Covid) and then an in-person one at our family home which cost maybe...$300. 

We did not do a special urn or anything, and like I said, there was no burial plot, so that reduced costs a lot. 

[simpsongal]

I'm sorry - this too shall pass. Hopefully after a year it's just behind you. We're here for the venting and hopefully the estate lawyer/financial advisor can help w/your options for paying the funeral expenses. I'm no help b/c my grandfather prepaid his funeral (NJ) but his simple estate indeed took a full year to go through probate.

I'm taking this as a PSA to ask questions about these matters when I finally get to an estate lawyer w/my mom. I'll be handling everything, though I expect to have power of attorney and abilities to backdoor handle things when the time comes (hopefully not any time soon).

ETA: Since people are mentioning, my dad had a viewing and was cremated (so we rented the casket).  I believe the all in cost was $9K w/o catering and whatnot afterward.

[shauni27]

ProfessorArtNerd, I am really sorry you are dealing with all of this. It sounds awful and stressful. No advice, just sending support.

[emilyinchile]

I'm sorry, lady. This all sounds really stressful and about way more than just the life insurance money. As far as the immediate issue goes of not having a collection agency harassing you for payment of the funeral, is there any chance your parents/aunt will go along with "we thought we would be getting this money to pay for the funeral, and we literally cannot afford it right this second, so instead of ruining our credit and our lives can you please loan us the money, and we'll pay you back once we get the house money?"

[definitelyO]

ugh - what a nightmare - so sorry

I would agree that proceeds from your aunt should first go to paying any expenses that were incurred as a result of her passing.

My friend became a widow in his 30s with young children - he wishes that they had life insurance so he didn't have to have the pressure of working to keep paying bills when he should have been able to take extended time with his kids and getting his life back on some sort of track.

[letsgetweird]

I'm sorry you're having to deal with this.

You mentioned your aunt's retirement. Is it an IRA or a 401k? If so, are you and your sister named as beneficiaries on these accounts? Typically if you're the beneficiary, the payout can happen fairly quickly once you have a death certificate.

[MixedBerryJam]

I don’t know if my experience is typical or crazy but when my husband died the funeral director waited until the life insurance was paid out before he charged me anything. That took, iirc, more than just a couple of weeks but less than a month. I had no prior relationship with the funeral home so I have always just assumed that was SOP when there’s life insurance. As for what it pays for, I have basically maintained our lifestyle and launched the kids. And it feels weird to me, the loudest mouth in the room when it comes to life insurance, that I don’t actually have any anymore.