16 Jun Do we have to pay for a funeral with life insurance proceeds?

Q. My step-sister is the executor of our father’s estate. She has not provided any documentation as to where the money has gone. Further, she wants the siblings to forfeit their life insurance proceeds to her to pay for a funeral that no one can attend because of the coronavirus. What recourse do we have?
— Beneficiary

A. We’re sorry to hear about the loss of your father.

More and more often estate beneficiaries are retaining their own attorneys to make sure the executor properly administers the estate.

This is especially common when step-siblings and multiple marriages are involved, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newton.

She said an executor appointed in New Jersey has an obligation to account in detail to all estate beneficiaries.

“I can say with certainty that no one who is a named beneficiary of a life insurance policy has to use it to pay for the decedent’s funeral or estate debts unless they promised the decedent that they would do so,” Reading said. “So from the facts you present, the siblings should not have to refund anything.”

Without an attorney, the beneficiaries are entitled to an accounting and should demand one in writing, Reading said.

In lieu of an accounting, she said, the beneficiaries could ask to see the bank statements that show all transactions.

“If the executor is also working without an attorney, that might be easier for the executor,” Reading said. “Honestly though, it is very difficult to get results without hiring an attorney who knows how to get this done — an elder law attorney.”

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This story was originally published on June 16, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.