Will my profit sharing be liquidated if I die to pay for my mortgage and lien? 7 Answers as of June 11, 2013

I have a Profit Sharing Plan from work as well as a private life insurance policy. If I died suddenly, would these be liquidated to satisfy the mortgage loan and second lien?

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Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
You have doubtless designated a beneficiary for your profit sharing plan, and the plan goes to that beneficiary without regard to the property and obligations in your estate. Whoever receives the property which is encumbered by the mortgage will then become responsible for the mortgage, independently of whether they receive the profit sharing plan or not.
Answer Applies to: California
Replied: 1/18/2011
DiManna Law Office, LLC.
DiManna Law Office, LLC. | Dawn DiManna
That depends on who you leave the house to and whether you want it sold or not - then it can be sold to satisfy the mortgage.
Answer Applies to: New Hampshire
Replied: 1/15/2011
Law Office of David P. Farrell
Law Office of David P. Farrell | David Farrell
No, they will not be liquidated to satisfy your mortgage loan(s).
Answer Applies to: California
Replied: 1/15/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
These questions are much too complicated to answer in this forum.
Answer Applies to: South Dakota
Replied: 1/15/2011
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
You have a named beneficiary or beneficiaries for your Profit Sharing Plan and life insurance. The money from the Profit Sharing Plan and life insurance policy will belong to the beneficiaries your named which they will use as they please since it will be their money. If you want that money to be used to pay your mortgages then you have to create a trust to receive the money from the Profit Sharing Plan and insurance upon your death and instruct the trustee to use the money as you wish. This is not a bankruptcy question but rather an estate planning question. You might want to prepare a revocable living trust and have the trust become the beneficiary of your Profit Sharing Plan and insurance and instruct the trustee how the funds are to be used and who will get your property. You can also provide in the trust for administration of your property in case of serious disability.
Answer Applies to: California
Replied: 1/14/2011
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