Can life insurance proceeds be seized by creditors of the deceased?

UPDATED: Mar 21, 2012

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Can life insurance proceeds be seized by creditors of the deceased?

I have a term life policy and my wife is the sole beneficiary. I also have an unsecured personal debt that is mine alone — my wife is unaware of it and did not sign the note. If I die, do the policy proceeds go directly to my beneficiary wife or do they become part of my estate to be used to pay the unsecured creditor. Is my wife liable in any way for my debt?

Asked on March 21, 2012 under Estate Planning, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you have a life insurance policy on your life where your wife is designated as the beneficiary under the policy, assuming you pass before she does with the policy in force, the insurance proceeds go to her under the laws of all states in this country as a gift outside of any probate of your estate assuming you have a Will.

The only way your wife would be respinsible for any of your debts upon passing would be if there are not enough assets in your estate to pay your creditors and the creditors assert that the debt you incurred is a martial community debt that your wife would be responsible for.

I suggest that you consult with a Wills and trust attorney about possible estate planning needs of you and your wife.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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