Can the beneficiary of a life insurance policy be held responsible for debts of the deceased?

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Can the beneficiary of a life insurance policy be held responsible for debts of the deceased?

My sister was in a car accident and passed away 6 days later. She did not hit anything or anyone; the accident was caused by a tire blowout. There were 2 people in the car with her. One was thrown from the car because they did not have on a seat belt. My mother and I found out while going through my sister’s things that her car insurance had just been canceled. She did have a life insurance policy, of which my mother is the beneficiary. Can she be held responsible for the injuries to the other 2 people or can they sue against her life insurance?

Asked on August 25, 2011 Mississippi

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

No.  A beneficiary of life insurance proceeds has nothing to do with the estate at all.  The reason is the certain monies pass outside of an estate; this includes life insurance proceeds.  Therefore, a beneficiary under a life insurance policy is entitled to such proceeds free and clear of any estate debts or similar obligations.


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