Who Gets the Money if a Beneficiary Is Incarcerated?

Here's another reason to stay out of jail. If you happen to be the beneficiary of a will, trust or life insurance policy, you won't get the money if you're locked up. Just who does get it depends on the reason you're behind bars. In extreme cases, the funds might go to your victim or victim's family, or even the prison system. That's a score for the taxpayer since it helps pay for a criminal's upkeep.


If an inmate is the beneficiary of a trust, the trustee must check with the state victim compensation board and government claims office regarding any funds or property interest he receives. Those agencies deal with restitution. If the person in jail is named as a beneficiary in an irrevocable trust, his information should be given to the appropriate government office as soon as possible after the trust creator dies. For example, under California law the state must get this information within three months of the death date. Any money the government agency gets depends on state law, why the person is in jail, and for how long.

Life Insurance - Homicide

As a general rule, if you are named as the beneficiary of a life insurance policy, don't kill the policy owner. While this scheme is a movie plot staple, the reality is crime doesn't pay. Virtually all states have laws prohibiting anyone convicted of homicide from receiving the proceeds of a life insurance policy on the victim, and that includes the killer's heirs. Don't think you can get away with it -- it rarely happens in the movies, and probably less so in real life. Law enforcement always looks to see who benefits from a victim's death, and a big life insurance policy that benefits you will point straight to you.


Sometimes, the person in jail is named in a will going through probate. The estate executor will need to inform the same state agencies as a trust beneficiary. Those offices will need a copy of the deceased's death certificate, as well as the name, birth date and place of incarceration of the heir. She also needs to give the agencies the contact information for the probate court, along with the case number of the probate file.

Inherited Assets

What happens to the assets the jailed individual would have received in a will depends on the laws of the state. In some cases, the jailed person could be left out entirely, and other beneficiaries will split his share. In other cases, the assets could go to the criminal's next of kin. If the deceased did not leave a will, some state laws might keep the incarcerated person from inheriting anything at all.


About the Author

Jane Meggitt has been a writer for more than 20 years. In addition to reporting for a major newspaper chain, she has been published in "Horse News," "Suburban Classic," "Hoof Beats," "Equine Journal" and other publications. She has a Bachelor of Arts in English from New York University and an Associate of Arts from the American Academy of Dramatics Arts, New York City.