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The IRS and creditors - as in your creditors or your mother's creditors?
Okay, thanks for the clarification. Give me just a few minutes to type out your answer for you. Thanks!
Under section 1108.051 of the Texas Insurance Code, creditors cannot reach the proceeds of a life insurance policy. http://www.statutes.legis.state.tx.us/Docs/IN/htm/IN.1108.htm#1108.051
Ok, so how do they know exactly that that money was from life insurance?
You just keep it in a separate account by itself and show the deposit of the check into that account with no deposits from any other source.
So just open a separate account just for that money?
What about monies received from an IRA? Just roll those over into an inherited IRA or pull out the money and deposit into account as well?
It is not that much from the IRA....$15K is all, due to it being split between siblings.
Usually leaving those in an inherited IRA account is best but some states do not provide protection for IRAs and there is no federal protection outside of bankruptcy.
So it would almost be worth me paying the 10% in taxes upfront, taking out the lump sum and putting the money in the bank account with the life insurance money?
But TX appears to provide protection via Ins. Code section 42.0021
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Thank you so much!! You were a great help...excellent! Have a great day :)
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