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Whole life ins cash out question

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    Whole life ins cash out question

    Ok, I have a friend whos grandparents are getting ready to do a chapter 7. Poor people - at there age... Anyways, they have life ins policies (wholelife) that are quite old, BUT need them for when something happens to either one of them for funeral costs, burial etc. Now there attorney told them that the trustee may take them and cash in the whole life policies.

    Now:

    How are the people suppose to pay for funeral costs and burial when there time comes, they are in there late 70's if the trustee takes there polocies?

    Secondly, if the trustee take the policies will that show as income for them?

    Lastly, there attorney said that the trustee has no way of knowing how many policies they have, unless they put it on the petition. Is that correct?
    Can't they check somewhere to see what amounts and how many plolicies they have?


    Thanks

    #2
    Jessiegirl, check the exemptions for the state that your friends grandparents are located to see if the whole life policy is exempt - www.legalconsumer.com
    Filed CH 7 9/30/2008
    Discharged Jan 5, 2009! Closed Jan 18, 2009

    I am not an attorney. None of my advice is legal advice in any way..

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      #3
      Anyone else experience anything like this?

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