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Post by Caris on Jul 24, 2017 17:56:15 GMT -5
They used the bait and switch technique, so here is my question before I find a lawyer that I can't even afford.
Under Texas law, we know that as the benificiary of an ex spouse's life insurance policy, the living spouse is revoked, and if there are no other benificiaries, the money goes to the estate. However, what happens if the deceased spouse had an insurance policy on the living spouse's life – does the insurance company have the right to offer it and transfer it to the living ex spouse, or would that policy also belong to the estate as it belonged to the deceased spouse?
Knowing this may help me fight the bait and switch that the insurance company just committed against me. I can't believe what they just did. It's so underhanded.
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Post by DryCreek on Jul 24, 2017 18:43:16 GMT -5
Commenting from the peanut gallery, the insurance policy he had on your life is an asset that would transfer to his estate. I don't see a reason you would come into that picture at all.
Mind you, normally one has to authorize someone else taking out an insurance policy on their life. I'd wonder if you would have the right to revoke that authorization in this case, because now someone else will benefit from your death and that might not be in your interest.
Insurance is regulated by state, so you'll have to ask someone in that jurisdiction for guidance - you might start by asking another insurance company a "what if" and see what they say.
I do agree that it's messed up that you would be precluded from benefiting from your ex's passing, yet his family could benefit from yours.
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Post by Caris on Jul 24, 2017 19:04:37 GMT -5
Commenting from the peanut gallery, the insurance policy he had on your life is an asset that would transfer to his estate. I don't see a reason you would come into that picture at all. Mind you, normally one has to authorize someone else taking out an insurance policy on their life. I'd wonder if you would have the right to revoke that authorization in this case, because now someone else will benefit from your death and that might not be in your interest. Insurance is regulated by state, so you'll have to ask someone in that jurisdiction for guidance - you might start by asking another insurance company a "what if" and see what they say. I do agree that it's messed up that you would be precluded from benefiting from your ex's passing, yet his family could benefit from yours. He's had that policy on my life since 1992, and I must have agreed to it back then, although he was the owner of the policy. Now he's dead, the insurance company transferred it over to me without my consent, and it had a loan on it. They say it's a done deal, and I'm now responsible, but I can cash it in (for not much), but will have to pay taxes on the interest which I won't get. So bottom line is they'll give me a measly cash value, but I'll pay taxes on much more than I get. This makes no sense to me. They say if I let the policy lapse, I'll get nothing, and will still have to pay taxes on money I never received. What crazy 💩 is this? |
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Post by baza on Jul 24, 2017 19:09:56 GMT -5
"if the deceased spouse had an insurance policy on the living spouse's life" appears to be the key.
It reads like he took out insurance and paid the premiums with yours' as the life insured, so that if you died, he'd get a pay out.
If this is right, you were never the beneficiary. He was.
And with his death, the policy goes into some sort of hiatus, as he (or his executors) obviously won't be continuing to pay the premiums.
To resolve the matter, the insurance company may well be obliged to offer you the opportunity to "take over" the policy on your life and take up the responsibility of paying the premiums.
It would be smart to run this scenario past a lawyer in your jurisdiction.
But as you have written it, it seems that the trigger event for a pay out was *your* death (which would have seen him get a pay out as the beneficiary of the policy).
And (thankfully) *your* death did not happen (and may it not for quite a while yet).
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Post by DryCreek on Jul 24, 2017 19:28:26 GMT -5
He's had that policy on my life since 1992, and I must have agreed to it back then, although he was the owner of the policy. Now he's dead, the insurance company transferred it over to me without my consent, and it had a loan on it. They say it's a done deal, and I'm now responsible, but I can cash it in (for not much), but will have to pay taxes on the interest which I won't get. So bottom line is they'll give me a measly cash value, but I'll pay taxes on much more than I get. This makes no sense to me. They say if I let the policy lapse, I'll get nothing, and will still have to pay taxes on money I never received. What crazy 💩 is this? Ya... time to get professional advice. First, I'd suggest talking to a tax advisor about what's really going on with the taxation effect. Then talk to an attorney who focuses on insurance, in Texas where the policy was issued. Without knowing more, it sounds like you'd be on the hook for taxes on the policy's total cash value, but those proceeds are being wiped out by a lien against the policy. If you let the policy lapse, it doesn't prevent that tax event. How title on the policy falls to you isn't intuitive to me, but ok. That might have been part of the policy you agreed to when it was setup. One of the things I would explore in talking with an attorney... the lien is probably a debt that the estate is responsible for paying. But the policy you hold is the collateral, leaving you holding a bag of poo. The "right" thing would be for the estate to payoff the outstanding lien (which is not your debt), leaving you with all the proceeds from cashing out the policy (from which taxes would be deducted, but with plenty leftover). |
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Post by Caris on Jul 24, 2017 20:55:09 GMT -5
He's had that policy on my life since 1992, and I must have agreed to it back then, although he was the owner of the policy. Now he's dead, the insurance company transferred it over to me without my consent, and it had a loan on it. They say it's a done deal, and I'm now responsible, but I can cash it in (for not much), but will have to pay taxes on the interest which I won't get. So bottom line is they'll give me a measly cash value, but I'll pay taxes on much more than I get. This makes no sense to me. They say if I let the policy lapse, I'll get nothing, and will still have to pay taxes on money I never received. What crazy 💩 is this? Ya... time to get professional advice. First, I'd suggest talking to a tax advisor about what's really going on with the taxation effect. Then talk to an attorney who focuses on insurance, in Texas where the policy was issued. Without knowing more, it sounds like you'd be on the hook for taxes on the policy's total cash value, but those proceeds are being wiped out by a lien against the policy. If you let the policy lapse, it doesn't prevent that tax event. How title on the policy falls to you isn't intuitive to me, but ok. That might have been part of the policy you agreed to when it was setup. One of the things I would explore in talking with an attorney... the lien is probably a debt that the estate is responsible for paying. But the policy you hold is the collateral, leaving you holding a bag of poo. The "right" thing would be for the estate to payoff the outstanding lien (which is not your debt), leaving you with all the proceeds from cashing out the policy (from which taxes would be deducted, but with plenty leftover). That makes sense. He was the sole owner of the policy, and the loan (which I knew nothing about occurred during the marriage.) Two things: My divorce decree absolves me of any debt before the date of the divorce, and makes him responsible for paying it all, which was fair because I had no debt. He owned the policy, so as Texas revoked me from the will, all his assets and his debts are paid by the estate. I don't see how this loan of his becomes mine. I need legal advice for sure, but what the hell...I'm minding my own business, and the next thing they transfer my ex's policy to me without me signing anything, and saying I'm responsible for the loan and taxes. |
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Post by DryCreek on Jul 24, 2017 21:00:32 GMT -5
Caris, yes, how you came to own the policy is curious. But not necessarily a bad thing if you can force the estate to make good on the debt it owes to release the lien - then the proceeds of the policy are yours free and clear after taxes. At the moment you only hold the negative side of the equation. The insurance company may be able to provide info on the lien against the policy, which might be useful in your conversation with an attorney. (They certainly *can* provide this info, but might be prevented from sharing it without an order.)
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