Who gets life insurance payout when the beneficiary dies?
Q. My dad passed away five years ago in June. My mother and I just recently found out that a family friend left my father insurance money of over $7,000.  Confused  A. Were going to make several assumptions to give you an answer. First, were going to assume that youre talking about the proceeds from a life insurance policy and that it was purchased in New Jersey. You didnt say who died first  your father or his friend. Depending on who died first, the question has very different answers, said Tom Szieber, a trusts and estates attorney at Herold Law in Warren. If the family friend died first, and assuming your father never claimed the proceeds, then, pursuant to N.J.S.A. 46:30B22, the proceeds would be presumed abandoned because more than three years have passed since the insured died, he said. If thats the case, the executor of your dads estate would need to request a property search and then file a claim through the New Jersey Unclaimed Property Administration, he said. If the executor obtained the proceeds for the questioners fathers estate, then they would be distributed in accordance with his will  if he had one  or New Jersey intestacy law if he did not, Szieber said. The questioners mother would not be entitled to the proceeds directly from the policy, as the beneficiary  the questioners father  was alive at the time of the insureds death.  But if your dad died before the family friend, then the policy proceeds would be the property of the policys contingent beneficiary, if there was one, Szieber said. If not, they would pass in accordance with the language of the policy itself.  Often, the policy, if there is no contingent beneficiary, will direct that the proceeds pass to the estate of the insured and be distributed in accordance with the family friends will or New Jersey intestacy law if there was no will, he said. Unless the questioners mother was in the family friends will, she would not have much of a case to recover the life insurance proceeds, he said. Email your questions to Ask@NJMoneyHelp.com. Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.coms weekly e-newsletter.