Life Insurance

September 9th, 2005 by Questions

If I transfer ownership of my life insurance policy to my son prior to declaring bankruptcy can he be made to transfer it back or cash it in, as to become part of my assets? Could there be any other adverse impact of this action?


One Response to “Life Insurance”

, Barton Goth, GCO Inc. Bankruptcy Trustees said:

I would not recommend this course of action as it would cause you substantial difficulty during the course of the bankruptcy. This type of act would be considered either a fraudulent preference or a fraudulent conveyance, your trustee would be required oppose your discharge as you were not acting in good faith or with due diligence, the court would leave you in bankruptcy for as long as it deems necessary and may require you to reimburse the estate the equivalent value of the life insurance or potentially grant a judgment against your son for the same value. It is never a good idea to make any last minute transfers as the are easily discovered and the consequences can be severe.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)