[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.amorusolaw.com\/blog\/life-insurance-incidents-of-ownership-beware-of-estate-taxes-white-plains-ny\/#BlogPosting","mainEntityOfPage":"https:\/\/www.amorusolaw.com\/blog\/life-insurance-incidents-of-ownership-beware-of-estate-taxes-white-plains-ny\/","headline":"Life Insurance & Incidents Of Ownership – Beware of Estate Taxes!","name":"Life Insurance & Incidents Of Ownership – Beware of Estate Taxes!","description":"Are the proceeds of life insurance policies owned first by a taxpayer\u2019s wife and then owned by a family trust, includible in a taxpayer\u2019s gross estate? The estate tax is currently set at a generous level, with married couples able to protect up to $10.5 million combined. So it can be enticing for many taxpayers […]","datePublished":"2013-07-25","dateModified":"2023-08-12","author":{"@type":"Person","@id":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/#Person","name":"Amoruso & Amoruso LLP","url":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/","identifier":5,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Amoruso & Amoruso LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","width":0,"height":0}},"image":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0192ac1c24cf.jpg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b0192ac1c24cf.jpg","height":849,"width":566},"url":"https:\/\/www.amorusolaw.com\/blog\/life-insurance-incidents-of-ownership-beware-of-estate-taxes-white-plains-ny\/","about":["Elder Law","Estate Planning","Life Insurance","Trusts"],"wordCount":309,"articleBody":"Are the proceeds of life insurance policies owned first by a taxpayer\u2019s wife and then owned by a family trust, includible in a taxpayer\u2019s gross estate?The estate tax is currently set at a generous level, with married couples able to protect up to $10.5 million combined. So it can be enticing for many taxpayers to sit back and relax without worrying about crossing that $10.5 million line. However, one should know there is always a risk when it comes to ignoring your life insurance.Fact: without proper planning and structuring, life insurance will become part of the taxation math for your \u201cgross estate\u201d and you could end up getting hit by a state and\/or federal estate tax.Those planning their estates and working to provide for financial security for their family often do so by way of life insurance. Indeed, the concept of life insurance is precisely to replace the lost income from the loss of a breadwinner. Of course, those planning with life insurance should be mindful of a potentially dangerous term in \u201clegal speak\u201d: \u201cincident of ownership.\u201dA recent WealthManagement.com article tackles this term head-on with an article aptly titled \u201cIncidents of Ownership.\u201d The IRS employs this term to differentiate those life insurance proceeds that will count a part of the \u201cgross estate\u201d value and those that will go scot-free to the family as intended.Unfortunately, ensuring there are no incidents of ownership is not just about buying the right policy, but structuring the ownership and beneficiary arrangements accordingly. Oftentimes a very specific form of \u201cirrevocable\u201d trust is required. Teaching point: the time to plan for tax-savvy protection of your life insurance begins before the application for the insurance is inked.For more information on gift tax exclusions please visit my estate planning and elder law website.Reference: WealthManagement.com (July 9, 2013) \u201cIncidents of Ownership\u201d"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.amorusolaw.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Life Insurance & Incidents Of Ownership – Beware of Estate Taxes!","item":"https:\/\/www.amorusolaw.com\/blog\/life-insurance-incidents-of-ownership-beware-of-estate-taxes-white-plains-ny\/#breadcrumbitem"}]}]