Legal Question in Wills and Trusts in California
My father passed away recently leaving my mother as the beneficiary of his life insurance policy. Both parents have considerable debt. I am worried that when my mother receives the sum (approx. 750K) that it will be vulnerable to creditors.
Is there a way I can protect this sum from creditors reaching it? I have heard that perhaps I should set up an irrevocable trust?
On another note, prior to my father's death, he intended to change the beneficiary of the policy to myself. We have this in writing. However, unbeknownest to him, he could not do so because he was not technically retired. Is there any interest I could claim to put the proceeds in my name so I do not have to worry about my mother's creditors?
Any information is greatly appreciated. Thank you!
1 Answer from Attorneys
Upon your father's death, the life insurance money immediately passed to your mother, so setting up a trust is too late to protect the funds against current creditors, but she should do some estate planning herself to avoid the probate process and future creditors. You have to check that some of your father's debt is not also the responsibility of your mother, especially if they used the same credit cards and checking account.
You should read the life insurance policy. There seems to me to be no reason that your father had to be retired before he could change the beneficiary. If he failed to make the change because of bad advice from the employer or insurance company, you might have an argument that you are entitled to the money and an arm's length settlement between your mother and you might shelter some of the money. But you are saying he did not know he could not make a change, but it is unclear what he did do to try to make the change and whether that would be sufficient.
not proof read
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
