Can life insurance be garnished by creditors?

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PostPosted: Tue Feb 24, 2009 6:49 pm   Post subject: Can life insurance be garnished by creditors?  

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?



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PostPosted: Wed Feb 25, 2009 6:10 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

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PostPosted: Wed Feb 25, 2009 6:23 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

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PostPosted: Wed Feb 25, 2009 10:58 am   Post subject:   

Quote:
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

Quote:


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.



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PostPosted: Wed Feb 25, 2009 5:56 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.

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PostPosted: Sat Aug 29, 2009 9:50 pm   Post subject: social security  

can ss security be garnished


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PostPosted: 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.

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PostPosted: Mon May 10, 2010 9:25 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


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PostPosted: Tue May 11, 2010 1:15 am   Post subject:   

Once it is in your savings account, it is irrelevant where the moncy came from.


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PostPosted: 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.



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PostPosted: Tue May 11, 2010 11:43 pm   Post subject:   

Quote:
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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PostPosted: Wed May 19, 2010 5:39 pm   Post subject:   

Cannot be garnished

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PostPosted: Tue Oct 15, 2013 12:11 pm   Post subject: life insurance in the state of florida  

My father n law past away but owes student loans and medical bills along with credit cards bills. Can the creditors take that money from us or since we are the beneficiary to his life insurance policy they cant. From what I am undetstanding they can take the cash value but not the death benefit of 10,000.


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PostPosted: Tue Oct 15, 2013 2:31 pm   Post subject:   

Quote:
Can the creditors take that money from us or since we are the beneficiary to his life insurance policy they cant.
If there is a NAMED beneficiary (one or more), then creditors of the decedent cannot have any portion of the life insurance proceeds. They may still have a claim against his estate, but not his life insurance proceeds.


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PostPosted: Fri Jul 04, 2014 7:29 am   Post subject:   

If the owner dies, then the insurance proceeds become assets of the decedent's probate estate. A life insurance policy will have a designated beneficiary if decedent completed beneficiary designation form for the policy prior to the decedent's death.



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