In most cases, no, life insurance proceeds are not subject to estate debts. The most common exception is when the “estate” is a listed beneficiary (which is improper under Texas law, but that’s a discussion for another day.) In most cases, life insurance is a contract between the insured and the life insurance company, to pay benefits to a beneficiary. The deceased person’s estate (to which most debts attach) is not involved in the process. The notable exceptions are life insurance policies specifically geared towards credits. A common example is a credit life policy. In this policy, an insured purchases a policy to cover a specific debt, such as a mortgage. This way, should the insured die, the mortgage is paid off in full.
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Yes. A life insurance applicant may appoint anyone (or any entity) as a beneficiary on a life insurance policy, even a common law spouse. Also, if a common law marriage was in existence, then a common law spouse may have community property interests in a life insurance policy (purchased after the marriage) if the spouse is not listed as a beneficiary.
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Insurance Law, Wrongful death and probate
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Yes. However, the burden of proof shifts after the second anniversary of the death of the purported spouse. If successfully proven, the date of the inception of the common law marriage may be determined by the court.
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Insurance Law, Wrongful death and probate
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A common law marriage in Texas, if proven, carries the same validity as a ceremonial marriage. Accordingly, if there is a proven common law marriage, then the Texas rules regarding life insurance beneficiaries would apply.
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Insurance Law, Wrongful death and probate
Wrongful death causes of action are controlled by Chapter 71 of the Texas Civil Practice and Remedies Code (CPRC).
Per Sec. 71.004, the surviving spouse, children, and parents of the deceased are the only ones who can bring an action for wrongful death.
If none of the individuals entitled to bring an action have begun the action within three calendar months after the death, then the personal representative of the estate shall bring and prosecute the action unless requested not to by all those individuals.
In most cases, it is advisable to have the wrongful death beneficiaries and the beneficiaries of the estate sign a family settlement agreement prior to taking any action.
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A fiduciary duty is the highest standard of care one can owe to another. The fiduciary relationship is one of trust and confidence. The person or institution who owes the fiduciary duty must put the person’s interests above his or her own interests. Common examples of fiduciary duty include power of attorney holders, executors in wills, and trustees of trusts.
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Insurance Law, Litigation and judgments, Wrongful death and probate
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Business insurance planning includes insurance against the loss of a key person who is vital to the survival of a business. This type of policy can be used to inject cash into a business in order to survive while you replace the lost person. It can also cover buy/sell agreements, allowing the surviving member of the business to buy out the deceased member’s interest. Other types of insurance planning include wholly owned or captive insurance companies, umbrella insurance policy planning and commercial liability. Contact Us for more information.
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Insurance Law, Wrongful death and probate
If the initial premium was paid out of community funds, the life insurance policy may be a community asset. This means that one half of the policy “belongs” to the surviving spouse. If a third person is named beneficiary of a community owned life insurance policy, and the surviving spouse did not sign a waiver, then the surviving spouse may challenge the beneficiary designation. If naming the other person is found to be a fraud on the surviving spouse, the spouse may be awarded a share of the death benefits and the named beneficiary will be entitled to receive the remainder. If you have an insurance issue that you would like to discuss, please contact us.
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Probate is the process by which you prove that a person is deceased and who should be entitled to the deceased person’s property (including ownership of a lawsuit for injuries sustained prior to death.) The deceased is commonly referred to as the “Decedent” and the property of the Decedent is called the “Estate.” If the Decedent had a will, then the will needs to be taken to probate court where a judge will rule on the will’s validity (called a “prove up”). During this process, the judge will appoint (typically per the terms of the will) a representative of the Decedent’s estate. This person is called an “executor” of the estate. Contact us for more information.
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Possibly. If you meet the statutory requirements for being a common law marriage at the time the policy was purchased, and community funds were used to purchase the policy, then the policy may be considered community property. The surviving spouse would be considered a one-half owner. These tend to be fact specific matters. Please contact us if you would like to discuss this further.
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Insurance Law, Wrongful death and probate
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Texas follows “inception of title” when classifying life insurance proceeds. This means that ownership of the policy is established by the source of funds for the first premium. If that premium was paid prior to the marriage or with separate property, then the policy may be considered separate property. This is a highly technical area of law, and matters are case-specific. Please contact us if you would like to discuss a matter further.
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Insurance Law, Wrongful death and probate
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In Texas, a life insurance policy that is purchased after a person is married, and community funds were used to pay for it, then the surviving spouse may have an ownership interest in the policy. However, a spouse way waive rights to the policy by signing a waiver. If your spouse had designated another as the beneficiary of a life insurance policy without your consent, or if you have questions, please contact us at 214-696-0021
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If someone dies due to the act or omission of another, then there may be a cause of action by the heirs of the deceased for Wrongful Death. If the deceased suffered personal injury prior to death, then the deceased’s estate may have a cause of action called a survival claim. We can assist with either the prosecution of these matters. Some of the services include ancillary probate, appointment of personal representatives, appointment of an independent administrator of an estate, determination of heirs and determination of common law marriage. This also includes obtaining letters testamentary or letters of administration of an estate. Contact us if you have a situation that you would like to discuss in detail.
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Yes. Texas law recognizes informal marriages. This issue most often after the death of one spouse, where the surviving spouse is attempting to prosecute a claim or where a surviving spouse is seeking a death related benefit from the deceased spouse.
The elements of a common law marriage are that a couple (1) agreed to be married, (2) lived together as husband and wife, (3) represented to others that they were husband and wife, (4) were more than 18 years old and (5) neither party was already married.
If a person is attempting to prove the existence of an informal marriage, then that person should do so within two years of the date the marriage ended (by either abandonment or death), as the burden of proof will shift.
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Insurance Law, Wrongful death and probate
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