My husband died a few months ago, leaving heavy debts due to the failure of his business. All that is left are two funds from when he was in the armed services. One started to pay out during his lifetime and the other was due to be paid out after his death. His creditors are trying to get their debts paid from his estate – can they touch these funds ?
By: דיאנה שאלתיאל•Published on: 13 May, 2022The answer to this question depends on the conditions set between the deceased and the fund. In principle the courts have held that money from pension funds and life insurance policies are not funds that are subject to the Inheritance Law of 1965 , and do not form part of the deceased’s estate. Having said this, if it is conditioned that in the event of death the estate will be the beneficiary then the Inheritance Law will regard the fund or policy as part of the estate. If the funds are not part of the estate the deceased’s creditors have no chance in getting their debts covered from them. If they are part of the estate the creditor’s may be able to recover their debts from them. It does not matter if the money from the fund/policy was paid during the deceased’s lifetime or afterwards.