FAQs About Probate

Can Proceeds of Insurance Policy be Seized to Pay Debts of an Estate?

by Rania Combs

After you die, your estate is responsible for your debts. Creditors can make claims against your probate estate for what you owe.

Assets such as life insurance proceeds, IRAs and other qualified plans are non-probate assets. They pass to the person you designated as the beneficiary outside of a probate proceeding. Because they pass outside of probate, they are generally not subject to the claims of creditors.

In fact, the Texas Insurance Code specifically provides that proceeds of insurance policies are fully exempt from garnishment, attachment, execution, or other seizure, regardless of whether an individual beneficiary is named, or the insured estate is the beneficiary.

About Rania

Rania graduated magna cum laude from South Texas College of Law Houston and is the founder of Rania Combs Law, PLLC. She has been licensed to practice law since 1994 and enjoys helping clients in Texas and North Carolina create estate plans that give them peace of mind.

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