All too often, clients do not understand how their life insurance policies fit within their overall estate plan. The misunderstanding generally involves two key myths, both of which are false: (1) the idea that a will overrides a life insurance policy beneficiary designation and (2) the mistaken belief that life insurance proceeds are not includible in the insured’s taxable estate for federal estate tax purposes.
Myth 1: The idea that a will signed after a life insurance policy is acquired will override the life insurance beneficiary designation.
