by zterek » Fri Apr 16, 2010 05:29 pm
we were debating and someone in my office said that when you pass away that life insurance is part of the value of your estate and that part of your estate will be taxed if the value of the insurance police puts your estate over a certain limit. I say that the life insurance goes straight to the benny and "bypasses" any taxation or probate
Posted: Fri Apr 16, 2010 08:31 pm Post Subject:
If the owner of the policy and the insured person under the policy are the same person (known as "first-party ownership"), then yes- the amount of insurance proceeds paid to the beneficiary will be included in your gross estate amount.
The same applies if (1) you have actually made your estate your beneficiary (usually stupid) or (2) if you have assigned ownership of your policy to another person within three years of your death.
These are the common mistakes life insurance producers make constantly. How about just a little bit of estate planning training? That might help just a little...
InsTeacher 8)
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