Life Insurance Death Benefit Belongs to Estate or Beneficiary?

[PMartinJ]

What is the name of your state?What is the name of your state? OREGON (deceased); I live in California.

My mother died a couple of months ago (in Oregon); her debts (~$15k) exceeded her assets (~$5k). This is currently undergoing some legal process (probate?) by which a judge is going to divide her assets among her creditors.

Here's a twist: I was notifed today that she had a life insurance policy, and that I am the sole beneficiary. I do not yet know the amount of the policy.

Here's my question:

Does the life insurance benefit belong to her estate - thus creditors will likely make claims against it to recover some of the money they were owed - or does the benefit belong to only to me?

Thanks,
Martin in California

 

[Dandy Don]

Good news for you: the benefit passes outside of probate and belongs only to you. Now: do you intend to use some of it to help pay off some of mother's debts?

 

[PMartinJ]

Ethical High Road?

Good news for you: the benefit passes outside of probate and belongs only to you. Now: do you intend to use some of it to help pay off some of mother's debts?

Thanks, Don.

It turns out that the benefit will only be some small amount - perhaps $1000.

Do you think that using this token amount to pay off some of her debt is the ethical thing to do?

Martin

 

[Dandy Don]

No, you can keep it for yourself. I had assumed that the policy was paying off in a large amount.