The trust should provide how his estate will be distributed after his death. The insurance policy should pass to whoever is the named beneficiary on the policy.
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The answer to your question depends on facts that you have not stated in your summary. For example, if the assets are all titled jointing, as husband and wife, then yes, your mother would receive everything. If the assets are all titled in the name of the trust, then she may receive some of all, depending on the terms of the trust. If the trust leaves everything to the children, then your mother would not receive anything, from the trust.
If the assets are titled in your father's name, but list your mother as beneficiary, then she would receive everything.
If the assets are in your father's name alone, with no beneficiary listed, (which would be somewhat unusual for annuities and life insurance, then it depends on the companies involved. Some of them pay to the "estate" in these situations, and some pay to the "next of kin," which would be your mother.
If the assets are paid to the estate, it would depend on what the Will says. Normally when someone has a trust, they also have a "pour over Will" which transfers everything to the trust. If not, then the Will would direct the disposition of any such assets.
Since your father is still alive, you *may* have a chance to correct any problems with his estate plan, if he is still competent to do so, and he wishes to. But if "he is not making any sense," then it may be too late to do anything, in terms of revising the estate plan.
Your mother and you are going to need an attorney to help you sort through this.
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When a person passes, what happens to the assets they had at the time of their death is dependent on a number of things. The first is what type of asset was the item is. The proceeds of life insurance, annuities, pensions, and often times credit union accounts or bank accounts will go to the person listed as beneficiary on them. You would want to make sure of the beneficiary, and if changes needed to be made, that could be done with a power of attorney or conservatorship.
Assets that are titled directly in the trust name will be distributed pursuant to the terms of the trust (who the trust states are the beneficiaries).
The problem arises for those assets that do not have a beneficiary listed on them and that are not titled in the trust. Generally speaking, most attorneys preparing a revocable living trust will also do what's called a "pour-over will". This acts like a safety net for the estate. In a pour over will, any asset that, for whatever reason, is not put into the trust during your father's lifetime will be put into the trust at his passing. The pour over will lists the trust as the sole beneficiary, and while those assets may have to be probated, they will end up in his trust.
If there is no pour over will, then those assets will fall under what's called the intestate succession statute, and generally speaking, will go to his heirs.
The next issue is if an asset (such as real estate) is held jointly with another, the disposition of that asset will depend on the wording of the ownership. Joint with full rights of survivorship means that if your father passes the asset goes to the other owner(s) without going through probate. Tenants by the entireties means it goes to his wife without going through probate. If the property is held as "Tenants in Common", then whatever interest your father had in that asset will go to his heirs (or beneficiaries listed in his will.
Hope this helps. Good luck.
The information provided is based solely on the general information given and should not be construed as legal advice for your specific situation.