If I am the beneficiary of a friend’s life insurance policy, am I responsible for her outstanding credit card bills?
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If I am the beneficiary of a friend’s life insurance policy, am I responsible for her outstanding credit card bills?
Asked on October 27, 2015 under Estate Planning, New York
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Beneficiaries are not liable for a deceased's debts. If you were the beneficiary/heir of an estate, the bills of the deceased would be paid out first, then the remaining money (if any) would be distributed according to the terms of the Will or state law.
However, you are the beneficiary of a life insurance policy, accordingly you will recieve the proceeds directly; they do not become part of the estate. Therefore, debt ot no debt, you will be entitled to the full amount of the payout.
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