What happens to my commissions when I die?

[selfgen]

All of my commissions are paid to my corporation; it’s an S-Corp and my wife is a 50% owner. I never thought about this before. If I die, do all commissions cease or could my commissions continue to be paid to the corporation? What is the best way to prepare for this in order to preserve those renewal commissions as much as possible for the benefit of my loved ones?

 

[adjusterjack]

If I die

There's no "if" there.

do all commissions cease or could my commissions continue to be paid to the corporation?

The answer to that question is likely to appear in your commission contract. Read it.

What is the best way to prepare for this in order to preserve those renewal commissions as much as possible for the benefit of my loved ones?

One factor is whether your corporation is set up for ownership to pass to your wife in the event of your death. You'll need a lawyer to make sure of that.

Another factor is whether your wife has to be licensed along with the corporation's license in order to continue collecting commissions. You can check that with the insurance licensing department.

 

[Markthebroker]

All of my commissions are paid to my corporation; it’s an S-Corp and my wife is a 50% owner. I never thought about this before. If I die, do all commissions cease or could my commissions continue to be paid to the corporation? What is the best way to prepare for this in order to preserve those renewal commissions as much as possible for the benefit of my loved ones?

As was already suggested - read your contract. I am guessing that these are YOUR commissions, even though they are paid to the corporation, and cannot go to your wife. That's my guess, but read your contract, and get a good attorney. FYI, a good attorney is expensive, but a bad one will cost you much more.

 

[marindependent]

Another factor is whether your wife has to be licensed along with the corporation's license in order to continue collecting commissions.

I would argue that is actually the main factor. If your wife is not licensed in the states that the insurance is written in its all a moot point what the contract says. They may also require that she have E&O, a Broker Bond, etc, etc.

@Markthebroker hit the nail on the head: "I am guessing that these are YOUR commissions, even though they are paid to the corporation"

 

[Bill_Kiray]

We have had several situations where the principle of an agency passed away, and we were able to simple change the principle of the agency to ensure that the commissions continued. The spouse in this scenario would have to be licensed.

 

[Yagents]

And, if they are mapd plans, the spouse must be licensed and get certified each year to keep commissions.....I believe.

I do know for aarp uhc med supps, they have a "successor agent" program for spouses to receive renewals, if licensed in state and have E&O and notified and done within 60 days. Wife got license now for this reason

 

[rousemark]

We have had several situations where the principle of an agency passed away, and we were able to simple change the principle of the agency to ensure that the commissions continued. The spouse in this scenario would have to be licensed.

Perhaps it is different with corporations, but most life and health companies do not require a spouse to be licensed to receive vested commissions.

 

[Bill_Kiray]

Perhaps it is different with corporations, but most life and health companies do not require a spouse to be licensed to receive vested commissions.

That is true. I guess I'm coming at it from the perspective of MA commissions, and transferring the corp to a new principle. That's been most of the inquiries and situations we've dealt with for our agents.

 

[MedicareAgent]

i have looked into this as I am in the same situation as you.
The answer is this: You need to get your wife licensed and appointed with said companies. You can then sign a form with each company that upon your passing the commissions move to the wife under your company.

 

[Packerland]

Varies by company we have developed legal doucment for a Succession Plan document good with all carriers.

This is a major issue with many agents people in this industry.