Q: If my mother named me as beneficiary on all her life insurance policies, is that money part of her estate re: debts due?
Firstly, we live in the state of Virginia and I appreciate anyone's professional time and counsel. My mother had numerous life insurance policies ranging from $1,000 to 10,000 and has me named as the sole beneficiary on all policies. She had no will and her house and land have been in mine and my sibling's names for the past six years. Her only other assets are money in two joint checking accounts, one with her and my name on it, the other with her and my sister's name on it. Except for a savings account with approx $1,000 in it, can any of the life insurance money for which I am the sole beneficiary and/or the money in the joint checking accounts (which remain open and still have either my or my sister's name on them) be held liable to her creditors for her credit card debt? She had three major credit cards with approx $28,000 in total credit card debt. I intend to pay the funeral for all her expenses, but I am unclear legally as to what our responsibility re: the other debt.
A:
The proceeds of the life insurance policies should pass to the beneficiaries outside of the probate estate. Likewise the jointly owned bank accounts, which should pass outside of probate to the surviving owners of the accounts. The credit card debt can reach assets of the Probate estate, which appears from your question to be only the savings account funds. This assumes no complications or other assets you haven't mentioned. It appears you can pay the $1000 to your mom's creditors and that it is all they can collect from. It would be a good idea to consult an attorney where your mom lived to confirm that you haven't overlooked something and that you can do this. Many offer free initial consultations. Good luck.
PS: My comments here are offered for general information only and not as legal advice on your specific issues or the applicability of any particular law. My comments are not an invitation to join in, are not intended to create, and do not create, an attorney client relationship.
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