Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When a policyholder dies without a designated beneficiary on a life insurance policy, the death benefit becomes part of the decedent’s probate estate and distributes under Nebraska’s intestate succession laws. Under Neb. Rev. Stat. §30-2303 (link), assets pass to heirs in this order:
- Spouse only: If there is a surviving spouse and no descendants, or all descendants are also descendants of the spouse, the spouse receives the entire estate.
- Spouse and descendants: If there is a surviving spouse and descendants who are not descendants of the spouse, the spouse receives the first $100,000 plus one-half of the remaining estate; descendants inherit the balance per stirpes.
- Descendants only: If there is no surviving spouse, descendants inherit the estate per stirpes.
- Other relatives: If no spouse or descendants survive, parents or other relatives inherit under Neb. Rev. Stat. §30-2304 (link).
To enforce distribution of the life insurance proceeds:
- Open probate: File a petition for administration in the county where the decedent resided. See Neb. Rev. Stat. §30-2412 (link).
- Obtain Letters of Administration: After court approval, the personal representative receives official letters authorizing collection of estate assets.
- Claim the proceeds: Present the decedent’s death certificate and Letters of Administration to the insurer to obtain the policy proceeds.
- Inventory and notice: Report the proceeds in the estate inventory and publish notice to creditors under Neb. Rev. Stat. §30-2401 (link).
- Distribute the estate: After the creditor-claim period (typically six months under Neb. Rev. Stat. §30-2410 (link)), distribute proceeds to heirs per intestacy rules.
Helpful Hints
- Review the policy for any contingent beneficiary designations before assuming intestacy applies.
- Consider a summary probate process if the total estate, including proceeds, does not exceed $40,000. See Neb. Rev. Stat. §30-24,120 (link).
- Keep copies of all court filings, correspondence with the insurer, and receipts for distributions.
- Adhere to creditor notice deadlines to avoid personal liability for unknown claims.
- Seek legal guidance if heirs contest the distribution or if estate assets include complex assets.