When it comes to planning estate and final expenses, it’s crucial to leave behind clear instructions in a will, as well as complete and well-organized information about any assets, life insurance policies and other financial holdings.
Due to the complex nature of settling an estate, important assets may often be overlooked if there are no clear heirs or if family members are not aware that they’re in line for an inheritance.
According to the American Association of Retired Persons (AARP), life insurance companies are not technically required under the law to locate beneficiaries in the event that a policyholder dies. That’s why some of the latest tools offered by states and the NAIC are key to arriving at a complete picture of a family member’s estate.
The AARP notes that many companies do try to locate beneficiaries when a policyholder dies, and if they’re unable to do so, the money ends up being held by the state in the form of unclaimed property.
The AARP also advises family members that it is generally up to the estate or beneficiary to inform a life insurance company when a policyholder has died.
On a separate note, it’s also important for people to be sure their life insurance designees are kept up to date – particularly following major life events such as a divorce, re-marriage or the birth of a child.