Q: I owe more on my home then it’s worth. Does the beneficiary of my small life insurance have to use it on the house,
My house has foundation issues so no one will buy it.
A: Life insurance benefits are paid directly by the insurance company to the beneficiary named by the policy owner. That money is not part of the homeowner's estate. The executor of the homeowner's estate will have to decide what to do with the house, and could transfer it to the mortgage company by a deed in lieu of foreclosure.
Moshe Toron Esq agrees with this answer
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