We are in the process of bankruptcy. My husband was faced with a serious health issue last weekend and nearly died. Would the trustee have taken the life insurance money in case of his death? This is a serious question. My husband has had great concerns over this and our attorney is out of town.
In Bankruptcy Can Trustee Take The Life Insurance Money In Case Of A Death?
February 10th, 2010 by small business management consultant Leave a reply »
Advertisement
RSS
The answer if somewhat complicated.
The life insurance death benefit is not included in bankruptcy but when you get some money, your assets and all your money may be included in the Bankruptcy.
On this one your going to have to wait for your attorney. And, everything depends on who is named as the beneficiary. Is it you or your trust?
The life insurance money would have been paid out to the named beneficiary. If that was you, then yes, all that money would have gone towards your mutual debts.
So. Who is the beneficiary of his policy? That’s what matters.
In almost every instance of which I’m aware, the life insurance proceeds are exempt from BK proceedings. You all can rest easy.