Jean had just got married for the second time so decided to sell her house to move in with her new husband.  She had a life insurance policy that she had set up years ago, while she was married to her first husband.  When she sold her property she decided to update her Will.

She spoke to her lawyer who advised that she should check her insurance policies as part of making her Will, as it was important for the lawyer to know whether the insurance policy proceeds were going to be dealt with in the Will or not.

She discovered that she had recorded her first husband as the beneficiary of her life insurance policy, meaning that he would still receive the proceeds of the policy on her death!

Life insurance policies are often set up so that the policy owner is the beneficiary and therefore the person who receives the payment under the policy. Alternatively you can choose to nominate/name someone or several people as the beneficiaries. This may be your spouse (as in Jean’s case), your children or another nominated person.  If there is no named beneficiary, you as the policy owner are deemed to be the beneficiary and the payment is made to your estate upon your death and dealt with under your will.

Some people may choose to set up joint life insurance policies with their spouse. This means if one person dies, the payment is made directly to the spouse and bypasses the estate.

It is a good time to review your estate planning documents when you sell a property.  Your lawyer will be able to help you with this.