Can insurance, funds, and trust properties be enforced? How can debtors "protect" their property? How can creditors realize their claims?

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Can insurance, funds, and trust properties be implemented?

How can debtors "protect" their assets?

How can creditors realize their claims?

foreword

In judicial practice, the debtor's bank deposits, real estate, equity and other property will first be seized, seized, frozen, and finally executed by the court to settle the debt. However, whether the financial assets such as insurance, funds, and trusts can be executed has always been a controversial point in judicial practice. This paper will analyze the feasibility of insurance, funds, and trust property from a legal perspective, and discuss it in combination with judicial cases and legal regulations.

Can the insured property be executed?

Insured property mainly includesPolicy cash value, premiums, etcThe feasibility depends on the type of insurance and the beneficiary.

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Focus 1: Policy Cash Value

Policy cash valueIt means that when the insured applies for termination of the contract before the occurrence of the insured accident stipulated in the contract and the payment of the insurance money, the insurance company shall refund the cash value of the policy to which the insurance contract belongs to the policyholder. In layman's terms, it is the part of the funds that can be recovered when the insurance is surrendered.

In judicial practice, the court holds that the cash value of the policy belongs to the property rights and interests of the policyholder and constitutes the responsible property of the policyholder. According to the provisions of Article 2 of the Provisions of the Supreme People's Court on Seizure, Seizure and Freezing of Property in Civil Enforcement by People's Courts (hereinafter referred to as the "Provisions on Inspection, Withholding and Freezing"), the court can enforce it.

Case: (2018) No. 113 in the early days of Jiangxi, Deng Xiang and Xingtie No. 1 Industrial Investment Fund Partnership Enterprise Property Share Transfer Dispute Implementation Reply.

Court order: Pro-China Technology will pay 54.21047 million yuan for share transfer and 1.079832 million yuan for liquidated damages and 210,000 yuan for attorney fees to Xingtie No. 1 and Xingtie No. 2 within ten days after the judgment takes effect, and Deng Moumou, Deng Moumou and Xu Moumou shall bear joint and several liability for the above debts.

After entering the execution procedure, the Jiangxi High Court froze and deducted the cash value, dividends and interest and other property rights and interests of the life insurance products purchased by Xu Moumou in the Sichuan branch of the China Life Insurance joint stock company.

In the (2020) Supreme Law Enforcement Reply No. 71, the Supreme People's Court replied: The cash value of the life insurance policy is paid by the policyholder, and in order to pay the cost of the subsequent annual risk, the insurance company should pay the insurance after the insurance event occurs. Different from the insurance money, it does not have the exclusivity of personal dependence, nor is it the necessary living items and life expenses of the person subject to enforcement and his dependent family members.

The author comments:The life insurance contract has a long payment period, and if the policyholder surrenders the insurance halfway, he will face greater losses. Therefore, unless the policyholder has special events such as large capital turnover difficulties, he will generally not take the initiative to surrender. Unless there is a contract, when the policyholder, the beneficiary and the insured are not the same person, it can only be enforced when the policyholder is also the debtor involved in the case, that is, judicial compulsory surrender.

When the insurance is forcibly cancelled, the beneficiary and the insured may face greater losses. Therefore, judicial enforcement ensures the performance of the debt, but it may cause additional losses to the policyholder, the beneficiary and the insured.

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Focus 2: Insurance benefits

Property Insurance:Property insurance is an insurance with property and its related interests as the subject matter of insurance, aiming to protect the property safety of the insured, and is an insurance with investment attributes. The insurance money of property insurance constitutes the responsible property of the policyholder, so the insurance money of property insurance can be executed.

Life Insurance:Personal insurance money is mainly used for personal health, diseases, etc. It is an insurance money closely related to life and an insurance with personal attributes. According to Article 3 of the "Regulations on Inspection, Withholding and Freezing", the necessary life expenses of the person subject to enforcement and his dependent family members cannot be executed. Exception is that the amount of insurance money is very high, far exceeding the local required life expense standard, it may be executed.

The author comments:The insurance money needs to be obtained after the insurance period expires or after the insured accident occurs. If the beneficiary dies after the insured accident, and the beneficiary is also the debtor involved in the case, can the insurance money be enforced? If the insurance money is not obtained before the death, the court cannot enforce it.

The benefits obtained after death do not have the character of an inheritance and cannot be used to repay debts in accordance with Article 1161 of the Civil Code. Therefore, whether the insurance benefits will be enforced depends on the specific circumstances of the beneficiary.

Can the fund's assets be executed?

fund propertyMainly includeFund shares, fund dividends, etcThe cash dividends of the fund belong to the debtor's responsible property and can be enforced. and the feasibility of fund shares mainly involves the realization of fund shares.

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Focus: Fund shares

Article 7 of the Securities Investment Fund Law stipulates that debts not borne by the fund property itself cannot be enforced against the fund property, so the debtor's fund shares cannot be enforced by the court.

Case: (2021) Beijing 03 No. 775, Wang Moumou and Li Moumou executed the objection case.

On October 29, 2021, the Beijing Third Intermediate People's Court issued the (2021) Beijing 03 Execution Decision No. 775, ruling to suspend the execution of the 8110 × × 4891 account under the name of a management company.

The author comments:The "Securities Investment Fund Law" clearly stipulates that fund property cannot be enforced. One of the principles behind this provision is that funds belong to the property of others entrusted with management. When many investors purchase fund shares, the rights and obligations between holders of ungraded fund shares are the same.

The fund can invest in stocks, debt, non-listed company equity, etc. If the fund share is enforced, the fund manager may need to sell the stocks, debt, non-listed company equity and other targets invested by the fund in advance, which will seriously affect the stability of the financial marekt, and may cause huge losses to the fund due to early selling, affecting the investment interests of third parties other than the debtor.

In order to stabilize financial marekts and protect the interests of many investors, the Securities Investment Fund Law clearly stipulates that fund assets cannot be enforced.

The "Securities Investment Fund Law" clearly stipulates that the fund property cannot be enforced. It adopts a one-size-fits-all approach and does not consider the type of fund. For example, open-ended funds, fund shares can be subscribed or redeemed at any time or regularly. At this time, the subscription or redemption will not have a great impact on the operation and management of the fund. If the debtor chooses not to redeem, the court will not be able to enforce it, and the creditor's claim will not be realized.

III.Can the trust property be executed?

Trusts and funds are essentially the same, they are both entrusted to manage other people's property, but because of different regulatory agencies, business scope and regulatory rules have certain differences. The beneficial rights of trust property can be enforced, and whether the trust property is enforceable depends on whether the trust is revoked and whether it has independence.

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Focus:trust property

Article 17 of the Trust Law stipulates that trust property shall not be enforced except under any of the following circumstances:

(1) Before the establishment of the trust, the creditors have enjoyed the right of priority to be paid for the trust property and have exercised this right according to law;

(2) The trustee handles the debt incurred by the trust, and the creditor requests the repayment of the debt;

(C) the taxes borne by the trust property itself;

(4) Other circumstances stipulated by law.

The Trust Law adopts the exclusion method for the enforcement of trust property. As long as the circumstances do not meet the provisions of this article, the trust property cannot be enforced in principle.

The author comments:A trust involves a tripartite relationship between the principal, the trustee, and the beneficiary. In most cases, the principal and the beneficiary are not the same person. This provision of the Trust Law protects the stability of the trust property and the rights of the beneficiaries. Article 12 of the Trust Law stipulates that if the principal establishes a trust to harm the interests of his creditors, the creditors have the right to apply to the people's court to revoke the trust. The time limit of this article should be understood as "when the trust is established."

In practice, the principal usually has certain contingent liabilities such as debts or external guarantees. How to define the damage to the interests of creditors? How to define whether the trust property is independent of the trustee's other property? If the trust is revoked, the trust property is no longer bound by Article 17 of the Trust Law. How to protect the trust property?

conclusion

In judicial practice, the court will make a judgment considering factors such as the nature of the property, the situation of the beneficiary, and the contract agreement. If the debtor tries to evade the execution through insurance, trust, fund, etc., he may face the risk of being revoked or enforced. Therefore, it is crucial to reasonably plan the way of asset protection and do a good job of asset planning in advance.

suggestion

PROPOSE

The creditor may apply to the court to inquire about the debtor's insurance, funds, and trust assets, and apply for execution according to law.

When making asset allocation, the debtor should consult a professional financial lawyer to avoid the execution of the property due to improper arrangements.

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