My father-in-law recently died he was under bankruptcy can the trustee take his life insurance policy?

Question

What happens to the house and his vehicles?

Answer 1

Many times under a bankruptcy, you have to cash out your life insurance.  If he didn't do that, then the policy will pay whomever he listed as beneficiary.  If he's in a community property state, and his wife OR his estate is beneficiary, then yes, those procedes can be attached.  

The house and the car he will likely lose, under the bankruptcy bit.  That's not related to the insurance, though.

Answer 2

1. Was he married, AND if so, did the spouse also file for bankruptcy protection? If yes, then ...

2. Was she listed as the beneficiary on this policy? If yes, then she will have to use the new found benefit to pay into the bankruptcy.

If someone else was named the beneficiary, then there will be no impact on the beneficiary, as they are not obligated to pay his bills. If he did not name a beneficiary and the life insurance proceeds are going to his estate, then again ... the money will go into the bankruptcy. Life insurance amounts will go into the estate for TAX purposes, but the money isn't physically there, unless there are no beneficiaries listed.