Death Benefits Payable to Debtor

[2Bshinyandnew]

If I should become the beneficiary of death benefits from a term life insurance policy before I file for CH 7 bankruptcy in Florida, can these proceeds be exempted? The language is confusing to me. Here It says:

http://www.divorce-bankruptcy.com/Bankruptcy%20Florida%20exemptions.htm:

So, does that mean the death benefits of the insured are exempt or the death benefits of the beneficiary/debtor are exempt? Until I am ready to file my CH7 bakruptcy should my husband (he already filed and has been discharged from his sole-debtor CH7 petition last year) change his beneficiary of his term life policy to our children? Not that I am expecting anything to happen, of course.

[bktek]

One of the questions the trustee asked me at the 341 meeting was: Are you a beneficiary on anyone's life insurance policy?

As far as I know, you must report any "windfall" money you receive within 180 days of your BK filing. That would include money received from life insurance benefits, estate settlements, lottery winnings, etc ...

[justbroke]

The reason why that's confusing, is it's really written as if the "debtor" dies. So, if you filed bankruptcy, and suppose you were to die (let's not think that, but suppose), and your policy paid death benefits to say, your children... those death benefits are not part of the bankruptcy estate. However, if you were to die and the policy had no beneficiary, the policy would pay your estate and that would be subject to what I'll call, the wrath of the Trustee.

Likewise, if you are a debtor and receive a death benefit as a beneficiary of a life insurance policy or something property is bequeathed to you (by demise), then equally, that property and proceeds of the policy are part of your bankruptcy estate and subject to the wrath of the Trustee. That's why they ask if you are due to inherit money as a beneficiary of some policy.

At least, that's how I think about it.

[DeadManCrawling]

JB, as is often the case, is 100% correct.

Death benefits YOU receive from another are at risk of seizure if you file bk.

Death benefits if you die, and name your daughter as beneficiary, are not open to claims from creditors YOU had before death as part of probate on your remaining estate.

Again, though, is your daughter received those benefits, and was filing bk, they would be at risk.

The wording on these things can get confusing, and applies differently outside of BK court.