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cortrightlaw
cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
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I have a life insurance policy that has a cash value. I am

Resolved Question:

I have a life insurance policy that has a cash value. I am recently divorced an my ex husband is still listed as the beneficiary. Is this exemptable? Partially or in full? under which law? I currently only have 1029/00 remaining of my 4000.00 personal expemption. the policy has cash value of 5201.50
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cortrightlaw replied 1 year ago.

cortrightlaw : The cash value has to be protected by be of the allowable exemptions available in your State.
cortrightlaw : I took a look at your State exemptions and since you are required to use the Stare exemptions I do not see anything other then the $4,000 exemption for personal property that you can use.
cortrightlaw : The fact that your x is the beneficiary is not relevant to this question.
Customer:

ok, I was just having difficulties interpreting it, as I was told if I had switched beneficiaries over to my children already it would have been fully exempt

cortrightlaw : I do not see anything in your exemptions that states that. The beneficiary is only entitled to the proceeds of the insurance policy if you were to die. They actually have no rights until you die as you can change your beneficiary at any time. The cash value is money you have access to now and can withdrawal, while this is not an option for your beneficiary. Of course it would still be a good idea to switch your beneficiary now that you are divorced.
Customer:

The law I was trying to understand is 215-5/238

Customer:

I guess this is an Illinois state law,

cortrightlaw : Yes it is, can you paste the text of the law in this question if it is not to long
Customer:

it is from the list of exemptions for Illinois and reads: Life insurance, annuity proceeds or cash value if beneficiary is insuredís child, parent, spouse or other dependent

Customer:

That is the entire statement that I am able to locate

cortrightlaw : http://bankruptcy.justia.com/laws/illinois-bankruptcy-exemption-statutes-59
cortrightlaw : The website I just posted has a better explanation of the exemption and I have checked a couple of other resources which state that the entire cash balance of the policy can be exempted using the exemption you stated as long as the beneficiary is a dependent. So if you are able to change your beneficiary prior to filing you can use the exemption to protect the cash value.
Customer:

ok, thanks. that explains the spouse/exspouse issue, he wasn't and isn't my dependent. So it is the dependency status. Thank you

cortrightlaw : Glad I could help clarify it, good luck with your filing, let me know if you have any other questions as you proceed through the process.
Customer:

I do have two more law code questions, if I could ask them now. I have rollover Roth IRA accounts that I understand are exempt under federal law, but cannot find the law code to reference on my schedule C. Also I own a mobile home valued less than 10,000. I understand that is expempt, is that just the homestead exemption, or is there something else that is accurate?

cortrightlaw : The homestead exemption would protect the mobile home and the pension exemption would protect the 401k.
Customer:

Thank you very much, I guess that leaves one more question...I assume the Mobile home is listed on Schedule A then?

cortrightlaw : That is correct
Customer:

Thank you so very much! Have a good day.

cortrightlaw : You to, plz take a moment to rate my response.
Customer:

I will.

cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience: Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
cortrightlaw and other Bankruptcy Law Specialists are ready to help you

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