Can life insurance be taken to pay a deceased person's medical bills? Mortgage? 2 Answers as of November 25, 2012

In the state of Florida. My mother-in-law, whom I have power of attorney for, is under hospice care and not expected to live through the week. She made a will bequeathing specific items to specific people and let the remainder to my husband and myself. In the meantime, we have come to realize that her home (which is only in her name...even tho she is married) is upside down. I have also organized her bills...and she has several medical expenses that are unpaid as of now. I have tried to research to find out what will happen legally, but, have really only confused myself further. She does have a life insurance policy (@90k) as well as a retirement annuity (@$500/mo for 5 years). Can I protect these assets from being seized by the mortgage company? Also - will the items that have been listed in her will be seizable? Taxable? Thank you for any insight you are able to provide. I want to follow through with her wishes.

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Law Office of Pamela Braynon | Pamela Y. Braynon
As long as your mother in law is alive, the Power of attorney is active. One she passes away, the power of attorney dies with her. Most powers of attorney allows you the privilege of making loan in the name of the person. You can probably borrow against the life insurance policy to pay her medical bills and mortgage. Once your mother in law passes away, the only creditor that seize the property is the mortgage holder (if the property is the homestead) because the property is the collateral for the mortgage. Other creditors cannot place liens on the property if it is the declared homestead. If the property is investment property then liens can be placed against it. If the creditors place a claim against the estate, if the items listed in the will is personal property that contributes to the value of the estate, the courts will more than likely have the personal representative sell the items to pay the creditors that have placed a claim against the estate. It is always best to consult an attorney familiar with probate matters on this though.
Answer Applies to: Florida
Replied: 11/25/2012
The Law Offices of Laurie E. Ohall, P.A.
The Law Offices of Laurie E. Ohall, P.A. | Laurie E. Ohall
In the state of Florida, life insurance and retirement accounts are protected from creditors' claims at death, so long as the policies have beneficiary designations. If your husband or your mother-in-law's spouse is listed as beneficiary on these accounts, then the creditors will be unable to touch them. If her "estate" is listed as the beneficiary, then they will be able to file a claim against the estate and be reimbursed out of those assets. You will need to check the beneficiary designations on the policies/accounts. The values that you stated are not subject to any federal estate taxes and Florida does not have estate taxes.
Answer Applies to: Florida
Replied: 11/22/2012
Click to View More Answers: