by anitaanded1 » Tue Feb 24, 2009 06:49 pm
My mom has a judgment against her in Florida and the law firm is asking for information about her policy. Will she have to forfeit her policy amount ($7,000) to creditors upon her death?
Thank You!
Thank You!
Posted: Wed Feb 25, 2009 06:10 am Post Subject:
IMO the creditors can't garnish the life insurance benefits if it has a named beneficiary. After the death of the policy holder the policy benefits will go to the beneficiary and therefore can't be garnished for paying the debts of the deceased. But if the policy holder remains the owner of the plan at the time of her death, the policy would then get included in her estate and will be used towards paying the unsettled debts.
However, the laws might vary between the states.
Regards,
Juanita
Posted: Wed Feb 25, 2009 06:23 am Post Subject:
You may look -up the state provided list of exempted assets to know whether or not the creditors can claim the policy benefits. Following is the list of the exempted assets under the Florida bankruptcy law.
As far I know any cash value and the death benefits of a life policy is an exempted asset according to the FL bankruptcy law. Not only that in FL you can also protect the equity that you have accumulated in an asset from the creditors.
You may need to ask the law firm why they need the information regarding policies.
Hope this helps.
~Jeremy
Posted: Wed Feb 25, 2009 10:58 am Post Subject:
My mom has a judgment against her in Florida and the law firm is asking for information about her policy. Will she have to forfeit her policy amount ($7,000) to creditors upon her death?
Allow me to restate your question:
Question: Will the beneficiary of my Mom's life insurance policy in FLORIDA have to forfeit the death benefit paid to the beneficiary because my Mom had a judgment against her when she died?
Answer: No.
Florida Statute 222.13
222.13 Life insurance policies; disposition of proceeds.
(1) Whenever any person residing in the state shall die leaving insurance on his or her life, the said insurance shall inure exclusively to the benefit of the person for whose use and benefit such insurance is designated in the policy, and the proceeds thereof shall be exempt from the claims of creditors of the insured unless the insurance policy or a valid assignment thereof provides otherwise.
Posted: Wed Feb 25, 2009 05:56 pm Post Subject:
I am wondering if maybe the collection agency is using a scare tatic to get your mother to repay the 7,000 dollars. They are known to do this and it is actually illegal. I am with Gary, ask them why they need this information and you may want to quote the above Statute.
Posted: Sat Aug 29, 2009 09:50 pm Post Subject: social security
can ss security be garnished
Posted: Sun Aug 30, 2009 12:14 am Post Subject:
The answer to the original question is "no" unless the beneficiary is the insured or the insured's estate.
Posted: Mon May 10, 2010 09:25 pm Post Subject: DEFAULT
I HAVE DEFAULTED IN MY GOV, LOANS AS WELL AS MY PRIVATE LOANS. MY DAD PASSED AND I WAS THE BENFICIARY OF 15K. THAT WAS LEFT TO ME, CAN CREDITORS GARNISH THAT FROM MY SAVINGS ACCOUNT
Posted: Tue May 11, 2010 01:15 am Post Subject:
Once it is in your savings account, it is irrelevant where the moncy came from.
Posted: Tue May 11, 2010 11:41 pm Post Subject:
Your bank account cannot be "garnished" as wages may. But if a judgment is obtained against you, any and all of your assets may be seized by court order to satisfy the judgment.
Posted: Tue May 11, 2010 11:43 pm Post Subject:
But if the policy holder remains the owner of the plan at the time of her death, the policy would then get included in her estate and will be used towards paying the unsettled debts
Not true, unless there is no named beneficiary. If there is a named beneficiary, regardless of who/what the owner was, the money belongs only to the beneficiary.
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