QUESTION
Can I loan someone money and tie up their life insurance as collateral?
Asked on Jul 30th, 2011 on Estate Planning - Georgia
More details to this question:
If I loan my son-in-law money and he agrees to make me a beneficiary on his life insurance, is there a way to ensure he can't change the beneficiary later?
2 ANSWERS
Trusts and Estates Attorney serving Jacksonville, FL
Partner at
Law Office of David M. Goldman PLLC
3 Awards
Yes, but you would probably have to transfer the ownership of his policy into your name until the debt was paid off.
Answered on Aug 03rd, 2011 at 12:49 PM
Glen Edward Ashman
It is risky to assume that will work. What happens when he simply stops paying on the policy, or goes bankrupt and wipes out your debt? It is always a horrible idea for people to loan money. If you are bound and determined to do so, see a lawyer to draft proper documents. You still could lose but your odds improve.
Answered on Aug 03rd, 2011 at 11:05 AM