How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask cortrightlaw Your Own Question
cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
Type Your Bankruptcy Law Question Here...
cortrightlaw is online now
A new question is answered every 9 seconds

I have a life insurance policy that has a cash value. I am

This answer was rated:

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

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.

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.

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


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

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


That is the entire statement that I am able to locate

cortrightlaw :
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.

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.

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.

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

Thank you so very much! Have a good day.

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

I will.

cortrightlaw and 4 other Bankruptcy Law Specialists are ready to help you

Related Bankruptcy Law Questions