Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified Vermont attorney about your specific situation.
1. Overview of Beneficiary Designations in Vermont
Under Vermont law, life insurance proceeds generally pass directly to the named beneficiary without going through probate. If a beneficiary designation exists, the insurer pays the proceeds upon proof of death. See 8 V.S.A. § 3761(a) (https://legislature.vermont.gov/statutes/section/08/053/03761).
2. When No Beneficiary Is Designated
If the insured did not name a beneficiary or the named beneficiary predeceased the insured without a contingent beneficiary, the policy proceeds become part of the insured’s estate. In that case, the life insurance company will typically pay the proceeds to the estate’s personal representative.
3. Opening Probate and Obtaining Letters of Administration
- File a petition with the Probate Division of the Vermont Superior Court in the county where the decedent resided.
- Request appointment as personal representative (administrator) under 14 V.S.A. § 306 (https://legislature.vermont.gov/statutes/section/14/051/00306).
- Present the original life insurance policy and proof of death to the court.
- Obtain Letters of Administration, which authorize you to collect estate assets, including insurance proceeds.
4. Claiming the Proceeds from the Insurance Company
Once you hold Letters of Administration:
- Submit those letters, a certified death certificate, and a claim form to the insurer.
- If the insurer refuses payment, you may send a formal demand letter citing 8 V.S.A. § 3761(a).
- If refusal continues, file a petition in probate court to compel payment and award of proceeds.
5. Intestate Succession Under Vermont Law
With proceeds in the estate, distribute according to Vermont’s intestate succession statutes:
- 14 V.S.A. § 351 (https://legislature.vermont.gov/statutes/section/14/051/00351): Defines property included in intestate estate.
- 14 V.S.A. § 311 (https://legislature.vermont.gov/statutes/section/14/051/00311): Distribution to parents and issue if no spouse.
- 14 V.S.A. § 313 (https://legislature.vermont.gov/statutes/section/14/051/00313): Distribution when spouse and issue survive.
- 14 V.S.A. § 312 (https://legislature.vermont.gov/statutes/section/14/051/00312): Distribution when no spouse or issue.
6. Petitioning the Probate Court for Final Distribution
- Prepare and file a final accounting showing receipt and disbursement of the insurance proceeds.
- Submit a proposed distribution plan based on intestate succession.
- Serve notice on all heirs and interested persons as required by 14 V.S.A. § 321 (https://legislature.vermont.gov/statutes/section/14/051/00321).
- Attend a hearing and obtain a court order approving distribution.
Helpful Hints
- Keep a detailed chain of communication with the insurer and the court.
- Track deadlines for probate filings to avoid dismissal of your petition.
- Gather documentation of family relationships early to simplify intestate distributions.
- Consider retaining a probate attorney if disputes arise among heirs or with the insurer.
- Maintain clear records of all estate transactions to support your final accounting.