Can a person put the spouse on their whole life policy as a beneficiary if they are in bankruptcy, but the other spouse is not? 13 Answers as of February 14, 2014

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Stephens Gourley & Bywater | David A. Stephens
They can, but it may put the policy benefits at risk, depending upon whether the proceeds are exempt in your state. They are in Nevada.
Answer Applies to: Nevada
Replied: 2/13/2014
Goldsmith & Guymon
Goldsmith & Guymon | Marjorie Guymon
Yes. Whole life policies are exempt from bankruptcy.
Answer Applies to: Nevada
Replied: 2/13/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
There is no problem in changing the beneficiary to a life insurance policy while in bankruptcy, but unless the policy has been claimed as exempt on Schedule C, changing the beneficiary will not prevent a bankruptcy trustee from taking all of the cash value in the policy which is why bankruptcy planning is so crucial to a successful bankruptcy with the least harm to you and your property.
Answer Applies to: Nevada
Replied: 2/13/2014
Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
You can name any beneficiary you like. A better question, though, would be to ask whether the cash value of that whole life policy can be protected in bankruptcy. The answer to that will depend upon the amount of cash value and the state you live in. It is well worth the cost to hire an experienced bankruptcy attorney to help you protect the assets you have.
Answer Applies to: Colorado
Replied: 2/13/2014
Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
That depends on the reason for doing so and the chapter of bankruptcy used this would a matter to discuss with your bankruptcy attorney.
Answer Applies to: Arkansas
Replied: 2/13/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    That depends upon the jurisdiction (state) and the circumstances of the designation. Each state has statutory exemptions that allow debtors to keep certain property. If your jurisdiction has an exemption for whole life insurance and your spouse is eligible to claim the exemption, then it probably will not make any difference if your spouse changes the beneficiary. However, if the whole life insurance is not exempt and your spouse is attempting to change the beneficiary in an effort to make it exempt then he/she may get into serious trouble for trying to do so. Your spouse needs to consult with an attorney before making any changes to any assets while in bankruptcy.
    Answer Applies to: Indiana
    Replied: 2/13/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Changing the beneficiary is not an issue, as long as the asset itself is untouched or if changing the beneficiary is done for a reason to defraud the trustee or creditors.
    Answer Applies to: New York
    Replied: 2/13/2014
    Barr, Jones & Associates LLP
    Barr, Jones & Associates LLP | Andrew Brasse
    Yes, that would protect the policy from being taken by the trustee during the process.
    Answer Applies to: Ohio
    Replied: 2/13/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    Yes, that is OK.
    Answer Applies to: South Carolina
    Replied: 2/14/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    Yes, if the spouse who is in bankruptcy changes their beneficiary, I do not believe that that will present any problem to the Bankruptcy Trustee or the Court. They are not changing the actual ownership of the life insurance policy, just the beneficiary status.
    Answer Applies to: Pennsylvania
    Replied: 2/13/2014
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Question is very confusing. You can name anyone you want as a beneficiary.
    Answer Applies to: Alabama
    Replied: 2/14/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    I would see an attorney with the details. Generally beneficiary, okay but ownership, no.
    Answer Applies to: Michigan
    Replied: 2/14/2014
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    Under the Texas Insurance Code, Sec. 1108.051, life insurance policy benefits, including the cash value and proceeds of an insurance policy, are exempt from seizure by creditors and bankruptcy trustees so long as the policy is issued by a life, health, or accident insurance company, including a mutual company or fraternal benefit society. Sec. 1108.052 provides that with respect to the exemptions provided by Sec. 1108.051, the exemptions apply regardless of whether (a) the power to change the beneficiary is reserved to the insured or (b) the insured or the insured's estate is a contingent beneficiary.
    Answer Applies to: Texas
    Replied: 2/13/2014
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