Bankruptcy – Exemptions – Life Insurance – Beneficiary – Trust – Payment to Unsecured Creditors
In re Foster Where the beneficiary of the debtors’ life insurance policies is a trust, and where the trust authorizes payments to the unsecured creditors of the debtor-decedent - creditors who would otherwise have been barred from accessing such funds by the protection offered under N.C. Const. art. X, § 5 - such a trust is not for the “sole use and benefit” of the debtor’s spouse and children, as contemplated by art. X, § 5.
The court sustains the trustee’s objection to exemptions claimed in the debtors’ life insurance policies.
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Published: November 10, 2011
Time posted: 9:48 am
Tags: Bankruptcy, Beneficiary, Exemptions, life insurance, Payment to Unsecured Creditors, Trust







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