Legal Question in Wills and Trusts in California

Re: Debt

If the life insurance names a beneficiary, it is not liable for debts (except certain items, such as estate taxes). If it doesn't name a beneficiary (so that it becomes part of the "estate"), then it probably would be liable for debts.

Certain other assets would also be exempt from liability for paying debts, for example, retirement plans that name a beneficiary.

All assets your parents owned (including life insurance and retirement plans) would be subject to estate taxes, however (but if the estate was worth less than $2MM and they passed away this year, there are no federal estate taxes - and if they lived in California, there are no California inheritance taxes or estate taxes, either).

This information is not intended to substitute for professional legal advice and does not create an attorney-client relationship. You should accept legal advice only from a licensed legal professional with whom you have an attorney-client relationship.