Estate planning

PLR Says Sale of Life Policies by Joint Trust to Husband’s Irrevocable Grantor Trust Avoids Transfer for Value Problems

Topics: Estate planning, Grantor trusts, Irrevocable trusts, IRS, Trusts

In PLR 201423009 the IRS ruled that a transfer of a survivorship life insurance policy from a husband and wife grantor trust to a grantor trust of which the husband is treated as the owner for income tax purposes would not trigger the loss of the income tax exclusion at the insured’s death under the…

Life Insurance Beneficiary Designation Survives Parties’ Divorce

Topics: Estate planning

Jeffrey Clark purchased insurance on his life from West Coast Life and named his wife as beneficiary. When the parties divorced, Jeffrey completed paperwork to change the beneficiary to his sister. But the change of beneficiary paperwork was not submitted to West Coast until after Jeffrey’s death. The U.S. District Court decided that the original…

Divorce Decree Overrules Life Insurance Beneficiary Designation

Topics: Estate planning

The spouse of the insured had been named beneficiary of his life insurance policies. But under the parties’ divorce decree, both spouses specifically relinquished their claims against the other spouse’s life insurance policies. However, the husband died without changing his beneficiary designations. His ex-wife claimed the death benefits.