Take Steps to Ensure You Do Not Become a Long Lost Beneficiary

While a major life event will usually prompt a review of estate planning documents, what people sometimes forget is to check the designated beneficiaries of life insurance policies and retirement funds.

There is more to keeping these current than just making sure the right person is listed. To ensure that the funds are disbursed quickly -- and without any additional taxes or administrative fees -- it is also important to keep up-to-date contact information for each beneficiary with estate planning documents.

There are situations when an insurance company is notified of the insured's death but cannot locate the beneficiary. The company will wait four months for the beneficiary to step forward. After that, Michigan law requires the company to take "reasonable steps" to pay the funds to the beneficiary. Those steps may include sending written notice to the beneficiary's last known address.

If the insurance company cannot locate the beneficiary, it will hold on to the money for three years. At the end of that period, the company will turn the funds over to the Michigan Department of Treasury Unclaimed Property. The unclaimed property website makes it clear that the state does not take ownership of the funds. Rather, the state serves as custodian. Under Michigan law, the state will hold the funds indefinitely, releasing money only to the rightful beneficiary.

Unfortunately, the rest is up to the beneficiary. The state maintains a database with all the necessary information, but the state will not continue to search for the beneficiary or heir. To search the Unclaimed Property website, please click here.

Help is available

The estate planning attorneys at O’Reilly Rancilio are available to assist you with creating or updating your estate plan. For more information, please call 586-726-1000 or visit our website.