Question
What is the name of your state?What is the name of your state? OREGON (deceased); I live in California.
My mother died a couple of months ago (in Oregon); her debts (~$15k) exceeded her assets (~$5k). This is currently undergoing some legal process (probate?) by which a judge is going to divide her assets among her creditors.
Here's a twist: I was notifed today that she had a life insurance policy, and that I am the sole beneficiary. I do not yet know the amount of the policy.
Here's my question:
Does the life insurance benefit belong to her estate - thus creditors will likely make claims against it to recover some of the money they were owed - or does the benefit belong to only to me?
Thanks,
****** in California
Answer
Good news for you: the benefit passes outside of probate and belongs only to you. Now: do you intend to use some of it to help pay off some of mother's debts?
Answer
Good news for you: the benefit passes outside of probate and belongs only to you. Now: do you intend to use some of it to help pay off some of mother's debts?
Thanks, Don.
It turns out that the benefit will only be some small amount - perhaps $1000.
Do you think that using this token amount to pay off some of her debt is the ethical thing to do?
******
Answer
No, you can keep it for yourself. I had assumed that the policy was paying off in a large amount.