Can an annuity be used to pay for funeral and other expenses before the rest is distributed to the beneficiaries?

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1. Licensed in MI

   

   James Frederick

   Livonia Probate Attorney

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   Answered January 08, 2012 21:27. If there are beneficiaries named, then the annuity is not part of the probate estate. You cannot make them a part of the probate estate in order to be used to pay her bills. The proceeds pass to the named beneficiaries, who can use them or refuse to do so, according to their own wishes. While there may be a moral obligation to use the proceeds to pay for the decedent's bills, there is no legal obligation to do so.
   
   The administrative expenses of the estate are a priority against the assets of the estate only. If there are not sufficient probate assets to pay these expenses, then the creditors may well be out of luck.
   
   James Frederick

   I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice... moreI am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your state. The law changes frequently and varies from state to state. less

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2. Licensed in MI

   

   Edward SternishaPro

   Grand Rapids Criminal Defense Attorney

   Contributor Level 17

   

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   Answered January 08, 2012 21:42. I agree with Attorney Frederick. A beneficiary is different than an heir. A beneficiary is the person to whom the annuity company is directed to pay. The same for a Life Insurance policy. You can have a Will distributing everything to your spouse, for example, and if you forgot to change your ex-girlfriend (or boyfriend) as the primary beneficiary of your million dollar life insurance policy that your bought 10 years before you got married, your ex gets the million bucks and your spouse gets angry. Make sense? Yes, as Attorney Frederick properly noted, there may be a moral obligation but not a legal one.

   The comments listed here do not create an attorney-client relationship. The comments are for informational... moreThe comments listed here do not create an attorney-client relationship. The comments are for informational purposes only and are not to be considered legal advice. This attorney is only licensed in Michigan and does not give legal advice in any other state. All comments are to be considered conversational information and you should not rely on these comments as legal advice or in place of retaining an attorney of our own. The comments here are based solely on what you have provided and therefore are general in nature and with more specific facts or details a different answer or outcome could result. The legal system is not a perfect science and this attorney does not guarantee any outcome. less

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3. Licensed in MI

   

   Peter L. Conway

   Lapeer Probate Attorney

   Contributor Level 15

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   Answered January 09, 2012 03:29. At the time of your grandmother's death, she owned some things and probably had some savings or other accounts. Probate is the mechanism for wrapping up the financial side of your grandmother's life. Under the law some thing like annuities and insurance policies are not part of the probate estate. The law says creditors can only look to the probate estate for payment, so creditors cannot reach money in annuities.
   On the other hand, the annuity beneficiaries may feel a moral obligation to pay the creditors since they know that is your grandmother's wishes.
   You may want to talk this over with a probate attorney or a clerk at the probate court in Saginaw.

   You should not rely on this answer. You should consult a lawyer so you can tell the lawyer the entire situation... moreYou should not rely on this answer. You should consult a lawyer so you can tell the lawyer the entire situation and get legal advice that is precisely tailored to your case. less

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