Life Insurance Ownership

Life insurance proceeds are normally received by the beneficiaries free of income taxes. Unless steps are taken, however, the proceeds will be a part of the decedent's estate for federal and state death tax purposes.

To keep life insurance proceeds out of your estate, consider having the policies owned by either adult children or an irrevocable life insurance trust.


NOTE: If you are in a 45% estate tax bracket and purchase a $100,000 life insurance policy, your heirs will receive $45,000 more from this policy if you structure the ownership so as to keep it out of your estate.

 

Securities offered through American General Securities Incorporated a Registered broker-dealer, member FINRA, and SIPC. Member of American International Group, Inc.

Every attempt is made to keep information on this and related sites current and accurate. However, you should always consult your advisor before taking action based on information you get from this site or any other source. There may be other factors or options that would apply to your specific situation that are not covered in the brief introductory information presented here.
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