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Death and Insurance Question

Discussion in 'Other Off Topic Forum' started by Kenny94945, Nov 26, 2003.

  1. Kenny94945

    Kenny94945 Karting

    Nov 1, 2003
    144
    Marin Calif
    Can our members comment on this.
    I have tried quite a few people but no one seems to know.

    1 - I person dies in an accident and owe the Internal Revenue Service $20,000 and the US Justice Department $50,000
    2 - They have no assets (no car, no home, no property etc) Estimated value of their estate $10,000. (ten thousand dollars) or less.
    3 - He has Accidental Death policies worth $100,000 and one flexible life policy worth $40,000.
    4 - The beneficiary is his daughter. She was named beneficiary (changed from deceased spouse) over two years ago.

    Can the IRS or Justice Department demand or levy the funds paid to the beneficiary?

    EDIT:

    5 - Age: Daughter 40 years old
    6 - State: Daughter in California. Policies signed/ issued in California and father's death in California. Insurance companies headquarters in other states of the US.
    7 - Trusts: None
     
  2. 134282

    134282 Four Time F1 World Champ

    Aug 3, 2002
    40,617
    California
    Full Name:
    Carbon McCoy
    Kenny, it doesn't look like the IRS or the Justice Department can touch that money slated for the daughter;

    HOWEVER... How old is she...? Is she underage...? If she's underage and that money needs to be set up for through the state or the estate, thenit might be a different story... Of course, if there was already a trust fund set up for her, in her name, prior to the death of the insured then again, that money should be fine. Rules and laws vary from state to state and i'm in NY so you might want to consult a broker if you're in a different state... i'm still waiting on a call back regarding this question, so when i have more information, i'll post it; until then, let me know, if you can, how old the beneficiary is and whether she's already got a trust fund set up in her name or not; these may or may not be deciding factor... Also, what state is this in...? Thanks...
     
  3. 134282

    134282 Four Time F1 World Champ

    Aug 3, 2002
    40,617
    California
    Full Name:
    Carbon McCoy
    Kenny, just got off the phone... Age is unimportant... No creditors, not even the government, can touch her money... Even if a fund needs to be set up for her (one that wasn't set up before the insured passed), the government can't touch her money... Now we're going on the assumption that the IRS is looking for federal monies owed so this goes beyond just the state... Hope this helps...
     

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