Re: Life insurance question
[Re: eric space]
#7252388
04/26/21 08:15 PM
04/26/21 08:15 PM
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Joined: Dec 2006
Posts: 13,076 Central Pennsylvania
Nittany Lion
Don't call me Mister, Mister
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Don't call me Mister, Mister
Joined: Dec 2006
Posts: 13,076
Central Pennsylvania
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Good question Eric, I don't know the answer, my guess would be it will be taxable.
I got myself a seniors' GPS. Not only does it tell me how to get to my destination, it tells me why I wanted to go there.
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Re: Life insurance question
[Re: eric space]
#7252406
04/26/21 08:39 PM
04/26/21 08:39 PM
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Joined: Nov 2007
Posts: 9,833 St. Cloud, MN
trapperkeck
trapper
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trapper
Joined: Nov 2007
Posts: 9,833
St. Cloud, MN
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OK, here's the skinny, If the 4 kids are the primary beneficiaries, they will receive the death benefit proceeds, tax free. The beneficiary designation overrides the the will. If the kids want to take the money and run, that is their prerogative. The will means nothing in this case. The kids are not required to pay out anything. On the other hand, if a non-natural person is named as the primary beneficiary, such as "the estate of the insured", or a trust you will lose the tax benefits of the death benefit and the proceeds will be taxable through probate or the trust. Generally, it is rarely a good financial maneuver to make a trust or the estate the beneficiary of a life insurance policy. There are some rare instances where an irrevocable life insurance trust makes sense, but that doesn't appear to apply here.
"The voice of reason!"
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Re: Life insurance question
[Re: eric space]
#7252597
04/26/21 11:36 PM
04/26/21 11:36 PM
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Joined: Dec 2006
Posts: 17,379 Coeur d' Alene, Idaho
James
"Minka"
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"Minka"
Joined: Dec 2006
Posts: 17,379
Coeur d' Alene, Idaho
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Are we talking about the federal estate tax?
Isn't the exemption pretty big these days?
Jim
Forum Infidel since 2001
"And that troll bs is something triggered snowflakes say when they dont like what someone posts." - Boco
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Re: Life insurance question
[Re: eric space]
#7252640
04/27/21 01:33 AM
04/27/21 01:33 AM
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Joined: Dec 2006
Posts: 17,379 Coeur d' Alene, Idaho
James
"Minka"
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"Minka"
Joined: Dec 2006
Posts: 17,379
Coeur d' Alene, Idaho
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I don't think a president can amend tax law by EO. Why doesn't that take an act of Congress?
Jim
Forum Infidel since 2001
"And that troll bs is something triggered snowflakes say when they dont like what someone posts." - Boco
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Re: Life insurance question
[Re: eric space]
#7252839
04/27/21 11:36 AM
04/27/21 11:36 AM
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Joined: Sep 2013
Posts: 18,533 Green County Wisconsin
GREENCOUNTYPETE
trapper
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trapper
Joined: Sep 2013
Posts: 18,533
Green County Wisconsin
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this is worth investigating
look at putting all the money into a living trust , the trust is basically a corporation that takes care of the widow since every dollar of the interest would be paid out in costs the corporation would have no income to tax. ok maybe show 1 dollar income each year.
the house the land , the car , everything could likely be owned by the trust , the trust is managed by a board of trustees the kids and the widow being the members of the board of trustees.
she can keep here SS for spending cash and the trust can pay for the upkeep of the house , land , car ect.
then when she passes the trust can either be dissolved or continue working for the trustees , new trustees can be added as you get older.
Last edited by GREENCOUNTYPETE; 04/27/21 11:38 AM.
America only has one issue, we have a Responsibility crisis and everything else stems from it.
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Re: Life insurance question
[Re: eric space]
#7253194
04/27/21 07:45 PM
04/27/21 07:45 PM
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Joined: Nov 2007
Posts: 9,833 St. Cloud, MN
trapperkeck
trapper
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trapper
Joined: Nov 2007
Posts: 9,833
St. Cloud, MN
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Dam Eric, I'm sorry to hear that. I've been forced to work with a few lawyers in the past that were overly arrogant and undereducated, where it counted.
"The voice of reason!"
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