With every client we discuss the important of Life Insurance as well as its non-probate character, in other words, as long as a beneficiary is named other than the estate, the policy will pay out directly to that beneficiary, rather than passing according to will (and waiting for the Court’s probate process to be instituted).
Parents with young or young adult children should ensure they have a properly coordinated estate plan with any life insurance policies and retirement policies. Without proper coordination, when a child(ren) is/are named as the primary or contingent beneficiary, the policy will pay directly to that child (or that child’s guardian in the event of a minor child). With all of my clients, we discuss updating all beneficiary forms so that any policy proceeds are paid to the trust if the child(ren) are still under the age of trust termination and the carefully drafted contingent trust will control this valuable asset as well as probate assets gifted to the child(ren). For a good discussion on how life insurance payouts work, I recommend reading this article by Gina Roberts-Grey recently published in Investopedia.