Bobby,
I've got a little bit of information to follow up with what Sue wrote yesterday. It is important to name beneficiaries on all of your
life insurance policies and to keep them updated. Naming a beneficiary allows your insurance policies to stay separate from
your estate, bypasses the estate taxes, and counts only towards income tax as far as I know. Your insurance policy will
only go to the people you have named as beneficiaries regardless of what your will says. So, if you have a change in marital
status or if you have new additions to your family, you'll want to consider changing the beneficiaries on your insurance policy
in addition to changing your will. Your current spouse and family can easily see the estate divided according to your will and
the insurance policies going to a former spouse if you don't keep the beneficiaries updated.
In the event that there isn't a will, each state will have their own procedure for handling the estate. The order of precedence in
Alaska goes to surviving spouses, surviving children, then other family members like parents and siblings. The property will go
to an estate which will then need an executor. As I remember, it costs $1500.00 in Alaska to name an executor in the court
system. In the event that the estate's value is negligible, less than $15,000, there is an alternative which allows you to bypass
naming an executor and name someone to handle the estate. The only legal type expenses I had to worry about at that point
were finding a notary public to stamp the forms as I needed them and I had to buy several death certificates. Should you find
yourself in a situation like this, I recommend making an appointment with a lawyer to learn about all the forms, what your
options are, and how to handle the decedent's bills.
The key things I learned last June are to have a will, keep your insurance beneficiary list up to date, and make it clear where
you have financial accounts and investments. It will be much easier for surviving relatives to handle the unexpected funeral
expenses and bills if you keep everything in order.
Pete
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