Can a collateral assignment on life insurance be enforced if there is no proof of an underlying claim?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a collateral assignment on life insurance be enforced if there is no proof of an underlying claim?
My mother passed away and had a collateral assignment on her life insurance. The bank cannot find any debt ever having been owed by her. Can they hold the assignment indefinitely if they don’t find anything?
Asked on December 13, 2010 under Bankruptcy Law, Colorado
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am so sorry for your loss. What you are intimating is that there may be an adverse claim to the life insurance proceeds as you are challenging the assignment of the policy, correct? If there is nothing to collateralize then the challenge seems reasonable. Sowhat you need to do is to write to the insurance company and let them know that there is a question as to the collateralization and that you wish for them to interplead the funds in to court to allow you the time you need to figure out what is what. Then they will bring an action to deposit the funds and so at least you have them in a neutral place. Good luck to you.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.