If I have life insurance with my children and husband as beneficiaries. If I pass away, will this money have to pay off any debts before the remaining money is given to the beneficieries?
2 Answers from Attorneys
A life insurance policy is a contract that pays a benefit amount directly to the named beneficiaries. The money belongs to the beneficiaries and is not part of your Estate, so it is not something that is used to pay the debts of your Estate.
As long as the beneficiaries of the insurance are you children and their spouses, and not your estate or revocable trust, the money should go directly to them. Unless they are also liable on your debts, they should not have to use the money to pay off the debts.
IMPORTANT NOTICE: The above response is not intended to, and does not, create an attorney-client, fiduciary or other confidential relationship with the responder. Neither does it constitute the providing of legal advice or services or the giving of a legal opinion by the responder. Such a relationship can only be created, and legal advice and/or legal services provided, pursuant to a written agreement with the responder. Accordingly, no obligations of any kind are assumed with respect to any matter or question presented. It should also be noted that legal issues are often time sensitive and legal rights may be lost or compromised if you do not act in a timely fashion.