21May/112
Can a life insurance policy inherited by a trust be responsible for medical debt?
Question by msnoose: Can a life insurance policy inherited by a trust be responsible for medical debt?
When someone dies with a will & a life insurance policy can that policy be tapped to pay their medical bills? The policy is in a Trust for the daughter's college fund.
Best answer:
Answer by don_sv_az
The proceeds of the life insurance policy belong to the beneficiary completely. In this case it belongs to the daughter's trust and she or the person managing the trust can not be forced to use it t0 pay bills for the deceased. The deceased bills are paid out of their estate (belongings and investments).
What do you think? Answer below!
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May 21st, 2011 - 12:31
IT all depends on how the beneficiary was set up. If the policy was set up to go to a trust then it has to go to the trust. It the deceases estate was the beneficiary then it has to go to the estate and can be used to pay debts.
May 21st, 2011 - 12:32
Your question is unclear. If you mean that the insured party has died, then the beneficiary designation on the policy determines the benefit payout. If you are referring to tapping the cash value of a policy, that depends on who or what is the policy owner.