Taxes for beneficiaries on life insurance proceeds
by Guest » Tue Dec 15, 2009 10:02 am
Should my beneficiaries pay taxes on my life insurance policy proceeds?
Total Comments: 11
Posted: Sat Jan 02, 2010 02:22 am Post Subject:
The value of policy proceeds inures to the estate of the owner. A surviving owner might have the ability to "dispose" of the value before his own death.
In most instances, however, the owner is the insured, and has no such ability after death. Hence the value of making a trust the owner far enough in advance, and not simply the beneficiary.
The trust has a lifetime of up to 99 years. If it "dies" penniless at/before that point, because it has fully distributed its assets to its beneficiaries by then, there is nothing left in the way of an estate to tax.
Three cheers for the ILITs and Crummeys! (and similar alternatives)
Posted: Sat Jan 02, 2010 02:22 am Post Subject:
The value of policy proceeds inures to the estate of the owner. A surviving owner might have the ability to "dispose" of the value before his own death.
In most instances, however, the owner is the insured, and has no such ability after death. Hence the value of making a trust the owner far enough in advance, and not simply the beneficiary.
The trust has a lifetime of up to 99 years. If it "dies" penniless at/before that point, because it has fully distributed its assets to its beneficiaries by then, there is nothing left in the way of an estate to tax.
Three cheers for the ILITs and Crummeys! (and similar alternatives)
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