Does my Wife have to turn in the money she got from her Mother's life insurance to the estate funds to be evenly distributed to remaining heirs

Thanks for all the help but got it all taken care of

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    I don't know if it is important but can you identify the country? Also is the validity of the policy being contested? – mhoran_psprep Mar 27 '19 at 14:55
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    Who is designated as the beneficiary of the life insurance policy? Are these "heirs" actually collectors seeing to get a part of the estate? – Pete B. Mar 27 '19 at 14:56
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    Robert, for better or worse, questions that do not have a country tag will quickly attract US-centric answers. If ultimately, a non-US tag is added, we have a question that may not get the good answers it deserves, as it appears already settled. – JTP - Apologise to Monica Mar 27 '19 at 15:23
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    Robert, right now this doesn't have enough information to be answerable. What jurisdiction is this in? Is there a will? Is the estate otherwise solvent? Is your wife the named beneficiary of the insurance policy? Is the estate large enough to have estate tax implications (if US)? – Joe Mar 27 '19 at 16:43
  • money.stackexchange.com/questions/13350/… might be useful. – Nosjack Mar 27 '19 at 17:05

In the United States, the answer is no. Life insurance proceeds pass by operation of law. In fact, it would be a taxable event to pass it as a gift to the estate; your wife would have to pay the tax. The giver pays the tax. So you need a local attorney if there is any serious consideration of doing this.

Now there is another issue. If the overall estate is subject to estate tax, then the estate will have to pay any federal estate tax on the life insurance proceeds.

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    Nor does a life insurance beneficiary even have to be an heir to the estate, for instance with business "key man" policies. – jamesqf Mar 28 '19 at 16:56
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    @jamesqf or a lover, which has happened more than once – Dave Harris Mar 28 '19 at 16:58

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