Which documents control your life insurance policy?

As someone creating or updating an estate plan in California, your life insurance likely plays a significant role in your plans. Your life insurance may be how you intend to replace your income to help support your family or how you intend to cover funeral costs and credit card debts. It could also be the funding for a trust you created for your children.

When you review your estate plan and life insurance, it is important that you look at all of the documents, or you run the risk of your will contradicting your life insurance policy documents. When you correct or create your estate planning paperwork one document at a time, you have to consider the risk of your documents contradicting each other.

Which forms will have the final say if there is a contradiction in your paperwork?

The policy carries the most weight when there is a conflict

Ideally, people who draft or update estate plans would always review the full collection of documents to avoid mistakes, oversights and other issues, but that isn’t always what happens. In the scenario where someone leaves behind a life insurance policy with specific beneficiary designations and also named a beneficiary for their policy in their will, it is the life insurance paperwork, not the estate documents, that will determine who receives the life insurance proceeds.

When you update your will, it may not have the impact you expect unless you make other updates at the same time. If you have outdated beneficiary designations with the insurance company but a newer will, those older requests will have more authority during California probate proceedings than your statements in your will.

Knowing which documents to use and how to properly update your estate plan can help you prevent complications for the people you love after your death.