All Life Insurance Tips

Best Term Life Insurance Quotes Ownership?

My wife and I are in our 40's and 50's. We have created A/B trusts and transferred our assets to them, and expect to have estates that will benefit from the estate tax saving these trusts afford. We recently both purchased $1M 10-year renewable term life insurance policies that we expect to keep for 10 years. We chose not to use life insurance trusts because the purpose of the policies is to replace the lost income of the deceased spouse if one of us dies relatively soon, not to increase our final estate, and the trusts are somewhat costly. We each specified our own trusts as the beneficiaries, because we want the disposition of assets specified there to be used for this money. The trusts provide for the income, and principle if needed, to be paid to the spouse, and for the remainder to be paid to our child at the remaining spouses death. The question of ownership of the policies is less clear. My lawyer says that it doesn't make much difference who owns them, because the value (estate) taxed is only one year's premium, not the $1M. My accountant says that the $1M is taxed, and that each policy should be owned by the other spouse to avoid tax on that amount. A friend said that there's no way to avoid or significantly decrease the tax, so just leave the ownership as is (each spouse owns their own policy). A further fly in the ointment is that the insurance company (Massachusetts SBLI) makes some forms of trust ownership more difficult and costly. I'm confused. What ownership is the best? What is the benefit of that choice? http://proxyhide.cn/health-insurance.html http://proxyhide.cn/health-insurance.html http://proxyhide.cn/health-insurance.html

Public Comments

1. Posting in Food and Drink...???
2. I am not lawyer, but I do & have worked in life insurance for years: Trust ownership: This is the most difficult type of ownership, along with corporate ownership, as anytime changes are made, then the insurance company needs to be made aware. Trust docs & amendements have to be sent in to the insurance company. Signatures for any writtne requests have to be signed by the trustee. Claims paid upon death are generally more time consuming as well. Trust as bene is more common than trust as owner, but copy of trust must be sent in to update bene & when a claim is made. Most common bene designation is to individuals. As life insurance claims aren't generally taxable if named to an individual, why is it that your lawyer is having you name the trust as beneficiary? Couldn't you name each other as bene, then write into the trust how any remaining death claim proceeds/assets are to be distributed upon death?