Life insurance questions

LVG

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We've been discussing for awhile now the need to set up a trust. We need to figure it out soon. I have no idea how stuff would go if one of us died and with each of us having kids, etc. Would the spouse just get everything? Then when the surviving spouse passes, the kids of that spouse get it all and the first one's kids get nothing? Neither of us want that. So, yeah. Need to get that taken care of.

I think we both have like, 5x our salary. I'd have to get medical exams & such to get more than that and I doubt they'd insure me with all the stuff I have going on.

Go see a wills & trust lawyer. For $1500, you can get a pretty good set of death docs including a will, trust, and durable power of attorney.

If you die intestate (without a will) with a spouse and heirs who are not the legal children of your spouse, then 1/2 of your estate goes to your spouse, and 1/2 of your estate is equally divided among all of your heirs. ARS 14-2102.

If you have a valid will, then your estate is distributed to the will.

In either case, the process must go through probate.
 

LVG

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How so? Arizona is a community property state.

Community property works like this: if you're married and you earn $100, then you own $50 and your spouse owns $50 when the marriage ends (death or divorce), although the $100 is held jointly while the marriage survives. But not everything is community property; for instance, if your uncle wills you a home in Flagstaff, then you own all of the property, provided you don't transmute it by paying for its upkeep from community property funds. Similarly, if you had $10,000 and your spouse had $7500 before you married, that $10,000 is your sole and separate property, again providing you don't transmute it.

Think of community property like this: as soon as a death occurs, the property is split 50/50 between the surviving member and the decedent. So how do you divide up decedent's remaining share?

You can see how this gets complex when you figure in divorces, remarriages, and kids. For example, let's say Don had $30,000 in assets. $20,000 is in community property; $10,000 is sole and separate property. He has a spouse and one kid that is his legal kid, and one kid who is his stepson. Assume all who remain outlived Don by 120 hours (otherwise, they're determined to have pre-deceased Don under the sudden-death statute).

Under Arizona's intestate laws, if Don died, his spouse would get 1/2 of the separate property ($5,000), and 0% of the community property, although Spouse would own $10,000 in his/her half share of community property. ARS 14-2102(2). The legal child gets $15,000 ($5,000 sole and separate property and $10,000 community property). The stepkid gets nothing.

[edit] I'm pretty certain. This is what I remember from my bar classes. So take it with a grain of salt.
 

Jersey Girl

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Will and trust would be our next step. For reasons I won't get into here, we haven't even selected someone to care for Chloe should something happen to the both of us. (Yeah, yeah. I know, I know.)
 

Brian in Mesa

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Will and trust would be our next step. For reasons I won't get into here, we haven't even selected someone to care for Chloe should something happen to the both of us. (Yeah, yeah. I know, I know.)

I always thought that was what godparents were for...
 

Linderbee

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I always thought that was what godparents were for...
God parents are generally responsible for making sure their godchild is brought up according to the parents' faith. At least, that's how I've always understood it. Simply responsible for religious upbringing (I also believe in the Catholic faith, that duty is theirs regardless of whether the parents are living or not).
 

Brian in Mesa

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God parents are generally responsible for making sure their godchild is brought up according to the parents' faith. At least, that's how I've always understood it. Simply responsible for religious upbringing (I also believe in the Catholic faith, that duty is theirs regardless of whether the parents are living or not).

https://en.wikipedia.org/wiki/Godparent

Godparent: In both religious and civil views, a godparent tends to be an individual chosen by the parents to take an interest in the child's upbringing and personal development, and to take care of the child should anything happen to the parents.

I was raised this way. Was always told that if anything happened to both my mom and dad (before I became an adult) that my godparents would be responsible for me.
 

Dback Jon

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Naming someone a godparent without a corresponding legal document does little. Well it does show some interest on the part of the parents a court would not be bound by this

Years ago when my niece and nephew were kids, my sister and her husband legally named me the kids guardians in case of something happening to them
 

Jersey Girl

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Wikipedia says it "tends" to be. I am in the same camp as Linda. My siblings and I had different sets of godparents, though my parents had no intentions of us being separated if something happened to them. They had a separate plan for that.

But, yes, a lot of people are of the opinion that godparents are to take care of the child(ren) if something happens to the parents. Guess it just depends on the people involved and what they decide.

So, yeah, we need to address that for Chloe.
 

Dback Jon

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Wikipedia says it "tends" to be. I am in the same camp as Linda. My siblings and I had different sets of godparents, though my parents had no intentions of us being separated if something happened to them. They had a separate plan for that.

But, yes, a lot of people are of the opinion that godparents are to take care of the child(ren) if something happens to the parents. Guess it just depends on the people involved and what they decide.

So, yeah, we need to address that for Chloe.

One of the reasons my sister named me the guardian in case of death was that I didn't have kids of my own, so she knew that I would make them top billing - not that she thought my other siblings would do a bad job, but since they had kids of their own, it could at times get awkward.
 

Jersey Girl

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One of the reasons my sister named me the guardian in case of death was that I didn't have kids of my own, so she knew that I would make them top billing - not that she thought my other siblings would do a bad job, but since they had kids of their own, it could at times get awkward.

This is the main reason I don't want Chris's sister (who has four kids) to take Chloe if something happens to us.
 

Jersey Girl

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Okay, so open enrollment time at work. Was just reviewing our life insurance rates, and they seem kinda high. Also, I thought we had a term policy, but it looks like no. And it looks like that policy ends when I leave my job (which very well may happen in the next year or so). I can maybe convert that plan over, but it looks like it's an expensive hassle.

So, I really want to shop and get a term policy outside of work that will be good for the next 20 years and that will not expire should I leave my job. Thoughts? Advice? I'm not really looking forward to going through the process again, but I think this is probably the best option.
 

dscher

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Okay, so open enrollment time at work. Was just reviewing our life insurance rates, and they seem kinda high. Also, I thought we had a term policy, but it looks like no. And it looks like that policy ends when I leave my job (which very well may happen in the next year or so). I can maybe convert that plan over, but it looks like it's an expensive hassle.

So, I really want to shop and get a term policy outside of work that will be good for the next 20 years and that will not expire should I leave my job. Thoughts? Advice? I'm not really looking forward to going through the process again, but I think this is probably the best option.
Imo.. depending on your health its gonna be the biggest thing here. Non smoker status is the big thing when shopping on your own for individual policies . But personally, I would shop some online brokers that will find the best rates based on your health and age. Im not sure how they price off group employee coverage... But I would assume you are getting coverage based on non smoker status and if your workforce is older and you are younger that will also come into play.. anywho....long story short, my opinion is to just get a good amount of quotes and find the best price and just go with it. Basic term is pretty straight forward. So it should just come down to who is willing to give ya the lowest premium.
 

Jersey Girl

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We're paying over $1400 a year for the two of us. Both non-smokers. Both 47. Both in good health. (I take medication for low thyroid.) It's a $300k policy for both of us.
 

dscher

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We're paying over $1400 a year for the two of us. Both non-smokers. Both 47. Both in good health. (I take medication for low thyroid.) It's a $300k policy for both of us.
That does seem a little steep based on your health and age.. But then again.. I have not shopped life insurance in awhile. I would most definitely shop it and see what you find based on who wants to give you the lowest premium at the years youre looking for. Tons of websites nowadays too.. I know when I had my license, AIG and MetLife were known to have great rates for preferred plus(non smoker, good health) clients like yourself.
 

Jersey Girl

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That does seem a little steep based on your health and age.. But then again.. I have not shopped life insurance in awhile. I would most definitely shop it and see what you find based on who wants to give you the lowest premium at the years youre looking for. Tons of websites nowadays too.. I know when I had my license, AIG and MetLife were known to have great rates for preferred plus(non smoker, good health) clients like yourself.

Thanks. I'll check into MetLife. I actually have an agent with them since I have an additional retirement account with them.
 

BigRedRage

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Ive always shied away from it just because I figure their entire goal is to make sure they do not pay out my policy.
 

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