life insurance
Hi,
My son might be considering claiming personal bankruptcy. He is 21, works only 3 days a week and going to school. He got into a car accident without insurance and was sent a bill for $30,000 and faces fines for driving without a licence. He is only making about 600.00 a month before deductions. I divorsed his father 10 years ago and my son lives with his father.
My question is I hold a life insurance policy on my son a freedom 55 policy I make the payments and I am the sole benificary. He is unaware of this policy i hold. Do i loose this?
This is a tricky area of insolvency law and it would be important to discuss this directly with a licensed trustee. Bring a copy of the existing policy so the trustee will be able to review the specifics and give you an informed opinion.
Yes, there are a couple of ways to keep the policy. The first is to find out what the cash surrender value (CSV)of the policy is and agree to pay your trustee (for the benefit of your unsecured creditors) an amount equal to the CSV.
In additon, deoending on where you reside and who your beneficiaries are, the policy may already be protected under provincial laws. I suggest you contact a trustee near where you live and discuss it with them.
As long as this insurance is held by you, paid by you, and you are the sole beneficiary, then legally it is your asset, not his. As a result, if your son files for personal bankruptcy in Canada there will be no impact on your assets.