How can I protect my beneficiaries if I die in the middle of a lawsuit? 5 Answers as of January 18, 2011If I am being sued and I die how can I protect my family's (beneficiaries) money that I leave to them? For example life insurance, social security payments, money from my employer. Can the people suing me place a hold of some kind on my checking account?
Givner & Kaye | Bruce Givner
The answer to your question is largely dependent upon the law of the state in which you reside. For example, money in a bank account that you leave to your heirs will probably be lost to the judgment creditor. However, Social Security benefits are probably going to be exempt. You need to consult with a competent lawyer in your state.
Answer Applies to: California
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
Asset protection strategies can vary depending upon the assets and potential liabilities and the laws of the state of residence. Without knowing all the factors specifically involved here only general comments can be offered. First, assets that you own in your own name at your death are part of your probate estate. Creditors can claim against probate assets. Other assets such as life insurance, or annuities or IRAs, etc. pass by beneficiary designation and are not part of the probate estate and may be free of creditor claims. An executor of an estate can not distribute assets to beneficiaries until all debts of the decedent are satisfied. With these general concepts in mind, you need to meet with an estates attorney to discuss the specifics of your situation so that planning and estate documentation can be implemented to minimize your family's exposure to creditor claims as well as meet your overall estate planning needs and goals.
Answer Applies to: Pennsylvania