Short answer

If a life insurance policy has no valid, living beneficiary at death, the insurer will usually pay the proceeds to the decedent’s probate estate. Once proceeds become part of the probate estate they are generally reachable by the decedent’s creditors and must be administered through probate under New Hampshire procedures. To reduce the risk that proceeds will become estate assets subject to creditors, the most reliable tools are a clear beneficiary designation (primary and contingent), one or more beneficiary forms that name a trust or individual other than the estate, or the use of an irrevocable life insurance trust (ILIT) or third-party ownership established well before death. Each option has trade-offs; consult a New Hampshire attorney to choose the right strategy for your facts.

Detailed answer — what happens in New Hampshire when there’s no named beneficiary

1. How insurance proceeds normally pass

Life insurance is normally paid directly to the beneficiary named on the insurer’s beneficiary designation form. That payment is non-probate and usually not subject to creditor claims against the decedent’s probate estate. However, if the policy has no surviving, valid beneficiary (for example, the beneficiary predeceased the insured and no contingent beneficiary exists, or the beneficiary designation is invalid), the insurer typically looks to the policy terms and state law. In many cases, the insurer will pay the proceeds to the insured’s estate.

2. Effect of proceeds becoming part of the probate estate

If proceeds are paid to the estate they are administered by the executor (personal representative) through probate. Creditors of the decedent must be given notice and have the opportunity to present claims in probate; valid claims approved in probate can be paid from the estate, which may include life insurance proceeds. For general information about New Hampshire probate procedures, see the New Hampshire Judicial Branch probate pages: https://www.courts.state.nh.us/probate/. For the New Hampshire Revised Statutes (the state laws that govern probate and creditor claims), see the RSA index: https://www.gencourt.state.nh.us/rsa/html/.

3. Why creditor access matters

When proceeds enter probate they increase the pool of assets available to satisfy valid creditor claims. This can reduce or eliminate the funds ultimately available to heirs or intended beneficiaries. Because issuing an insurer check to the estate typically triggers probate administration, avoiding that result (by keeping proceeds non-probate) is the most direct protection from creditor attachment in many cases.

4. Practical steps insurers take

Insurers will usually request a certified death certificate and the beneficiary designation file. If no valid beneficiary is found, the insurer will follow the policy language and applicable state procedures — often making payment to the estate or distributing according to intestacy rules if the policy requires. That is why confirming a valid beneficiary designation on file is crucial.

5. Special situations to watch for

• Group/Employer policies: Some employer/group policies are governed by federal law (ERISA). ERISA rules and plan documents may affect beneficiary designations and creditor access. You should check the plan’s summary and speak with counsel for specifics.
• Contested beneficiary designations: If there’s a dispute about who is the valid beneficiary, the insurer may refuse payment until the dispute is resolved, which can delay distribution and may lead to probate litigation.
• Assignments and transfers: If the policy was assigned as collateral or sold or retitled before death, different rules apply depending on the assignment paperwork and timing.

How to protect proceeds (practical options for New Hampshire residents)

1. Confirm and update the beneficiary designation

Make sure the insurer’s beneficiary form names a living primary beneficiary and at least one contingent beneficiary. Keep copies of the signed beneficiary designation and any changes. The insurer’s form controls, so file changes directly with the company and request written confirmation.

2. Use an individual or third-party owner

If a third party owns the policy or is the designated beneficiary (for example, spouse, adult child, or trust), proceeds usually do not pass to the decedent’s estate. Transferring ownership or beneficiary designation can keep proceeds out of probate — but transfers should be made well before death and with advice about tax and creditor consequences.

3. Name a properly drafted irrevocable life insurance trust (ILIT) as beneficiary

An ILIT is a common tool to keep life insurance proceeds out of the insured’s probate estate and shield them from many creditor claims. To be effective the trust must be irrevocable and funded or established according to the trust terms and tax rules well before death. Improperly created or late transfers can fail to achieve the protection sought.

4. Avoid naming “estate” as beneficiary unless intended

Because naming the estate typically forces proceeds into probate, avoid that wording unless you want probate administration and the related creditor exposure.

5. Maintain contemporaneous records and notify key people

Keep copies of beneficiary forms, policy documents, and any assignments. Let the policy owner, executor, and family know where documents are kept to reduce confusion at death.

6. If you’re close to a potential creditor claim or insolvency, get legal advice before transferring ownership

Transfers made to avoid known creditors can be attacked as fraudulent transfers. A timely, carefully planned transfer with legal advice is critical if the insured has or may have substantial creditor exposure.

What to do after a death when no beneficiary is on file

1. Obtain multiple certified copies of the death certificate.
2. Contact the insurer promptly and ask for their beneficiary and claims procedures; request a copy of the beneficiary file and any forms they have on file.
3. If the insurer intends to pay the estate, open probate and consult the probate clerk or an attorney about creditor notice requirements. See the NH Judicial Branch probate information: https://www.courts.state.nh.us/probate/.
4. If you believe the proceeds should go to a person other than the estate (for example, a surviving spouse with an oral promise), obtain legal counsel quickly — beneficiary disputes should be resolved through the insurer or the probate court.
5. Preserve estate funds in a separate account while creditor claims are sorted out. Follow the executor’s duty to notify known creditors and follow New Hampshire procedures for presenting and resolving claims.

Helpful Hints

• Check beneficiary forms yearly, after major life events (marriage, divorce, birth), and whenever you change jobs.
• Name both a primary and one or more contingent beneficiaries to avoid unintended probate default.
• Keep original signed beneficiary designation forms in a safe, accessible place and give the insurer a copy.
• Consider an ILIT if you need creditor protection and estate planning coordination; create and fund it well before death.
• If creditors are a real concern, get state-specific advice from a New Hampshire attorney experienced in estate planning and creditor-debtor law before changing ownership or beneficiary designations.
• If you inherit proceeds that were paid to the estate, act quickly to learn the status of creditor claims and administer the estate correctly to limit personal exposure.
• Review employer/group policies separately, because ERISA-plan rules (if applicable) may control beneficiary and distribution rules.

Where to find New Hampshire law and help

New Hampshire statutes and full RSA text are available online: https://www.gencourt.state.nh.us/rsa/html/. For practical probate procedures and forms contact the New Hampshire Judicial Branch — Probate Division: https://www.courts.state.nh.us/probate/. Because life insurance, trust, and creditor questions are fact-specific, consult a New Hampshire attorney to apply the law to your situation.