Are life insurance proceeds exempt from bankruptcy and divorce?

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Are life insurance proceeds exempt from bankruptcy and divorce?

I have a “Total Control Account ” from my mother’s life insurance after she passed. Is this “death benefit” exempt from not only divorce but also for filing for bankruptcy?

Asked on May 16, 2012 under Bankruptcy Law, Wisconsin

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you are the beneficiary of a life insurance policy with respect to your mother, your receipt of it is a "gift" and is your own separate property. As such, such money would not be subject to a claim as a marital asset in the event of a divorce.

However, as to a bankruptcy proceeding, if you received any monies concerning the bankruptcy filing concerning the insurance policy, you are required under the law to list such as part of your schedule of assets.


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