How can we protect assets and insurance benefits left in a Trust?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
How can we protect assets and insurance benefits left in a Trust?
Deceased left the Trust as the beneficiary to his life insurance policy. Trust has breakdown of benefits and assets left to heirs. Deceased had a large amount of debt. We know the wife is only responsible for any debt which she guaranteed or co-signed, but does that mean that she is now responsible for the entire amount of the debt? Also, if the wife and a minor son are the only ones named in the trust and and she is the trustee for the minor, does the mother’s debt affect what is left to the son?
Asked on December 8, 2010 under Estate Planning, Nevada
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
I am so sorry for your loss. The basic rule is that the estate of the decedent is responsible for the debts of the decedent. What kind or trust was created? A revocable or non-revocable trust? Is it a spendthrift trust? This could possibly have some bearing on the matter. But the general rule is that the trust property is subject to lawsuits brought by the creditors. You can not transfer property in to a trust in the hopes of defrauding creditors. It would be against public policy. Creditors do, though, have a problem with knowing what is in the trust because the trust is not a public record. It honestly may have been foolish to have the trust be funded by the life insurance policy as life insurance passes outside the estate and directly to the beneficiary upon death. I think you need to speak with an attorney in your area. Good luck.
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.