When a person passes away, their estate typically goes to their heirs. This estate can include a variety of assets, such as property, vehicles, money, or stocks. A common misconception is that heirs are also entitled to a death benefit from a life insurance policy.
Understanding Heirs
Heirs are generally the closest living relatives of a deceased person. These can include:
- Relatives by Blood: Children, grandchildren, nieces, nephews, siblings, cousins, uncles, aunts.
- Adopted Children: Adopted children are legally recognized as heirs and have the same rights as biological children.
- Surviving Spouse: A surviving spouse is usually considered the closest heir.
Heirs are not chosen by the deceased. Instead, state law determines who is considered an heir and who is entitled to inherit from the estate. However, a will is always taken into account when distributing the estate after a person’s death.
Priority of Inheritance
If there is no will, inheritance is determined based on the order of priority. State law determines who gets priority and the largest portion of the estate. The order of priority in Denver, CO, is:
- Surviving spouse
- Children, including adoptive children
- Parents
- Siblings
- Grandparents
- Descendants of grandparents, such as nieces, nephews, aunts, etc.
This order of priority does not apply to a death benefit from life insurance. Life insurance from companies like AFI Insurance follows its own set of rules.
Heirs and Life Insurance
Life insurance in Denver, CO, is considered separate from the estate. A person chooses beneficiaries for their life insurance policy, and can change most beneficiaries before they pass away. They can choose anyone they want, including people who aren’t related to them, like a close friend. Some choose to have the death benefit donated to a charity or put in a trust.
Life insurance usually doesn’t involve the probate or estate process, and benefits are paid directly to the heirs. If no heirs are named, beneficiaries may be entitled to the death benefit. Agents at AFI Insurance can answer any questions you have about your policy. Contact us today for more information.
