As indicated in an article I wrote on May 3, 2016 regarding the withholding of death benefits by insurance companies, there have been some new developments. The insurance industry has had a long standing policy of holding death benefits if they were not contacted by the beneficiary. In other words, the burden was placed on the beneficiary to contact the company and make a claim. Many times, beneficiaries are unaware that they have been designated as a death benefit beneficiary. As a result, no claim was ever filed even though insurance companies have contact information related to the beneficiaries in their database. There was an attempt to obtain federal legislation to change the burden of contact to the insurance companies which was strongly opposed by the industry and its lobbyists. Unbelievably, the insurance companies opposed any change in the law which allowed them to use unclaimed benefits as reinvestment funds for their own gains.
If you saw 60 Minutes on CBS Sunday night you had to be astounded by the absolute greed and thievery of life insurance companies. Many of them, mostly all of the large companies, are being sued in a class action for failing to pay death proceeds to deserving beneficiaries. Roughly $7.5 billion have been withheld by these large companies over the years although the companies were aware of the insured's death. All insurance companies have means to accumulate decedents' names, from a death role, which is checked daily through their database. A spokesman for the insurance companies stated that it as the responsibility of the beneficiary to make a claim. If no claim is made, the company basically continues to use the funds gained through premiums and further invest the proceeds and reap further dividend or interest benefits, as its own. It was also indicated that the companies would continue to use cash value in the policies to pay premiums even after knowing of the death of the insured. Unbelievable! If the proper authorities can't identify this within the definition of criminal felony theft, I don't know how it could be further defined.
New California Law: Transfer on Death (TOD) Deed
Why Living Trusts are Failing in California (Part 1)
Living Trust and Estate Planning Hypothets Based on Actual Family Issues
Why Estate Planning With A Living Trust Is Critical For Minor Children
Living Trust Contests in California
Attention all of you Trustees of Living Trusts and children beneficiaries of the Trust- This case is a wake-up call. You know how you might want to punish a step-mother or step-father for becoming a life partner or spouse to your widowed mom or dad. Once the natural parent is out of the picture many times the kids and/or the Trustee exact some type of revenge on the step-parent. Well, you better take a listen to this California case.
In light of the recent U.S. Supreme Court case of Clark v. Rameker, creditors will begin to zero in on Inherited IRAs.
Take a look at the beneficiary distribution provisions of your Trust. If they conclude with the terminology, "outright and free of Trust," there is no asset protection for your beneficiaries, usually your children.