Yes, life insurance policies pass to the designated beneficiary. If the trust is not named as the beneficiary the owner of can designate anyone the owner wishes as beneficiary and can exclude from the benefits the beneficiaries of the trust.
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A person can have one heir as the beneficiary and keep it separate from the trust.
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Yes, this can be done. It happens all the time. This is one of the things that could easily defeat the objectives of the decedent. OR it could be that the deceased intended everything BUT the insurance to be equally divided. It all depends on the facts. The non-beneficiary siblings always assume that it was the intent that the insurance be part of the equal split. The problem with that is that it is usually just as easy to name all of the siblings as beneficiaries, instead of the one.
There are times when the insurance is intended to be used to pay for the funeral expenses. Even in this case, if the beneficiary refuses to use the proceeds for that purposes, there is no legal requirement for them to do so. This is one of the reasons it is a bad idea to name only one beneficiary on any asset, UNLESS it is the intent of the decedent that that beneficiary receive the asset on their own.
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