Will my profit sharing be liquidated if I die to pay for my mortgage and lien? How? 8 Answers as of June 10, 2015

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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James T. Weiner & Associates, P.C.
James T. Weiner & Associates, P.C. | James T. Weiner
Generally not .. they pass directly to the named beneficiaries.
Answer Applies to: Michigan
Replied: 6/10/2015
A Fresh Start
A Fresh Start | Dorothy G Bunce
Typically, when someone dies, their estate goes through probate. As long as the ongoing mortgage payments are being paid by whoever is living in the property, the mortgage company is unlikely to file a claim for full payment in probate.
Answer Applies to: Nevada
Replied: 6/10/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
No, your heir would get the money and could do what they want or you can leave a will to instruct an executor to liquidate.
Answer Applies to: New York
Replied: 6/10/2015
Ronald K. Nims LLC | Ronald K. Nims
How the money in a profit sharing plan will be distributed in the event of a participant's death is controlled by elections the participant made. The most common election is to distribute the funds to a spouse, children or (for younger people) parents. In that case, the deceased's creditors can't touch the money. The death benefit from a life insurance policy is controlled by the beneficiary designation that the owner of the policy has filled out. If the death benefit goes to specific beneficiaries (Jane Doe, "my wife", "my children", "the mathematics department of Indiana University") then the deceased's creditors can't touch the money. If the beneficiary is "my estate" then the creditors would be paid out of the money.
Answer Applies to: Ohio
Replied: 6/10/2015
GARCIA & GONZALES, P.C. | Richard N. Gonzales
If your estate did nothing, the home would go into foreclosure. This may or may not satisfy the debt. Worst case scenario if there is any deficiency, your estate would have to pay this deficiency, assuming their are assets in the estate. Sounds like you need to meet with an experienced Estate Planning lawyer. Good luck!
Answer Applies to: Colorado
Replied: 6/10/2015
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    The answer is a bit more complicated than that, it will depend to some degree as to who the beneficiary or payable on death is under the profit-sharing plan and who is the named beneficiary on the life insurance policy. I would suggest you see an attorney regarding estate planning as it is clear you are not clear on some of the concepts.
    Answer Applies to: Michigan
    Replied: 6/9/2015
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Life insurance is paid to the beneficiary named on the policy. The same is true of the retirement plan. What they do with the money is up to them.
    Answer Applies to: California
    Replied: 6/9/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Certainly not automatically. Generally, creditors are patient while an estate is going through probate. Presumably you will leave the property to some one. That person or those persons, together with your Personal Representative (i.e. Executor) will then decide whether to sell the property, or to keep it. If they want to keep it, they'll have to work out their own financing arrangements. If they are the same people to whom you leave your retirement funds, they have that much more latitude in what decisions they make. If you are thinking about the property you will leave when you die, you would be well advised to find a skilled lawyer with whom to discuss these matters, and draft a will and perhaps do additional estate planning. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 6/9/2015
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