What happens when a beneficiary, who receives life insurance monies in a payout, owes the estate? Can the estate then sue the beneficiary for money owed to the estate? The beneficiary lives in another state, has no money saved or much equity in house, and only money except what will be received through those life insurance policies?

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    Can you edit and add country tag. – Dheer Aug 22 '16 at 5:00
  • Theoretically, if they owe you money you can sue for it, and if you win where they get that money from is mostly irrelevant. We can't tell you what the odds are of your winning; you need to talk to a lawyer about that. – keshlam Aug 22 '16 at 5:04

If a person owes someone money, he can be sued for it, and forced to pay via court order.

It is completely irrelevant who that person owes money to (here: a not specified 'estate'), and irrelevant what source they get money from (here: life insurance payout).

What makes you think there is any special combination that allows the owing person to not pay their debt? If it would exist, everybody would use it to get out of his debt.


There is no special protection for money obtained from an insurance pay-out.


A beneficiary will receive the life insurance payment in a lump sum tax free payment. From there, if that person owes money etc, they could be sued. But it'll have nothing to do with receiving the life insurance benefit


The answers above are not quite correct. There are US states that protect the proceeds of life insurance contracts from certain types of debts in certain circumstances related to the estate and debts of the estate. This is a local law question.

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