When a person passes away, people are typically aware that some of the next steps involve distributing the deceased’s assets to next of kin according to his or her will. In Ontario, those who are designated to complete this task are known as executors. But do executors also have a role to play in the distribution of life insurance payouts that come following a person’s death?
As many people in Canada invest in life insurance, this is an important question that many have when it comes to executing wills. While executors typically are not directly involved with life insurance, they may come into contact with policies as they go through paperwork and organize documents. For this reason, it is helpful for them to understand a bit about how these policies work.
Executors may come across paperwork for insurance policies while going through other information. When this happens, it is important to alert someone immediately as sometimes these policies can be forgotten. Someone close to the deceased should also contact employers and insurance brokers from other types of insurance to double check whether there may be some forgotten policies.
Typically, life insurance exists separate from a person’s estate and does not go through the probate process. The exception to this is if the deceased left instructions for the life insurance amount to be paid into their estate. This would make the funds subject to probate, as well as forcing an executor to possibly use the funds to pay outstanding debts. Executors with questions about their responsibilities under Ontario law should contact a lawyer for support.