David, a Canadian citizen, asked DEDICA:
"My father in Vietnam recently passed away, leaving behind a life insurance policy. I am his son, currently living in Canada, and I rarely return to Vietnam. The insurer says my father named a beneficiary in the policy. So is that insurance money treated as part of the estate for my siblings and me to divide, or does the named person receive all of it? What should I do to protect my rights from abroad?"
DEDICA ADVISES The answer hinges on a single detail in the policy: whether a beneficiary has been designated. If the policy names a beneficiary, the insurance proceeds are paid directly to that person under the contract. This is not part of the estate and is not divided among the co-heirs. If the policy names no beneficiary, or the beneficiary died before or at the same time as your father, the money then falls into the estate and is divided under inheritance law. The first thing to do, therefore, is to ask the insurer to confirm whether the policy has a beneficiary.
Life insurance proceeds: when they form part of the estate, and when they do not
To determine whether the insurance money must be divided as inheritance, we must begin with the very concept of an estate. Vietnamese law limits the estate to the assets that the deceased actually owned while alive.
Life insurance proceeds arise only after the insured person dies, so they are not in themselves an asset your father held while alive. Who receives this money is determined by the insurance contract, through the beneficiary.
These two provisions give rise to two different situations:
- The policy DOES name a beneficiary: the insurer pays the money directly to the beneficiary under the contract. Their right to the money arises from the contract and does not pass through inheritance, so this sum is not part of the estate and is not shared with the other heirs. The beneficiary receives the full designated share, even if they are not among your father’s statutory heirs.
- The policy does NOT name a beneficiary (or the beneficiary died before, or at the same time as, the insured): there is no longer anyone designated by the contract to receive the money, so the insurance proceeds are brought into the estate and divided under inheritance law.
In the second scenario, if your father left no will, the estate, including the insurance money, is divided among those in the first rank of heirs.
In other words, insurance money is neither automatically part of the estate nor automatically outside it. The pivot is whether the policy names a beneficiary. This is a point many families misunderstand, leading to unnecessary disputes.
What to do from abroad to receive your rightful share
Even from abroad, you can resolve the matter in full without having to return to Vietnam regularly. The steps should follow this order:
- Verify the policy first. Ask the insurer to confirm in writing whether the policy has a beneficiary, who it is, and in what proportion. This information determines which of the scenarios above applies to you.
- If you are the beneficiary: you receive the money directly from the insurer, without going through an estate declaration procedure. The file typically includes the death certificate, identity and relationship documents, the insurance policy, and a claim form for the insurance proceeds.
- If the money is part of the estate: the co-heirs must jointly declare or agree on the division of the estate before a notary office in Vietnam (notarization of the inheritance), after which the insurer pays out according to that division document. This step is more complex when the co-heirs are in several countries.
- If you cannot return to Vietnam: you may authorize a lawyer in Vietnam to deal with the insurer, the notary office, and the other co-heirs on your behalf.
Conclusion
In sum, whether your father’s life insurance proceeds form part of the estate depends on whether the policy names a beneficiary: if it does, the beneficiary receives the money directly and it is not divided as inheritance; if it does not, the money falls into the estate and is divided among the first rank of heirs, which includes you. What you need to do is: (1) ask the insurer to confirm whether the policy has a beneficiary and who it is; (2) if you are the beneficiary, prepare your documents and have them consular-legalized to claim directly; (3) if the money is part of the estate, carry out the estate declaration before a notary; (4) if you are far away, authorize a Vietnamese lawyer to handle the entire process.
If you are unsure whether you are the beneficiary or a co-heir, or your family is in disagreement over the insurance money, DEDICA can review the policy, determine your legal standing, and act under a power of attorney with the insurer and notary offices in Vietnam, even if you do not return home. DEDICA also assists with consular legalization of documents from abroad and advises on lawfully transferring inherited funds overseas. Contact DEDICA for legal advice tailored to your case.
The above is for reference only; each case has its own facts, so please consult a DEDICA lawyer for advice precise to your own policy and documents.
