The bottom line Does life insurance count toward the taxable estate? Yes, if the insured owned the policy or held policy rights at death, the death benefit can be included in the gross estate under federal law. The result is separate from income-tax treatment and depends on ownership, beneficiaries, transfers, deductions, and the year of … Read more

The bottom line Naming a guardian and a separate financial trustee for kids lets you divide daily care from money management. A guardian raises the children, while a trustee follows the trust’s instructions for their assets. The American Bar Association says those roles can be assigned to the same person or to different people. The … Read more

The bottom line How does generation-skipping transfer tax apply to life insurance trusts? It applies to a direct skip, taxable distribution, or taxable termination involving a skip person, with the trust’s terms and the transferor’s GST exemption affecting the result. A life insurance death benefit is not automatically subject to GST tax simply because grandchildren … Read more

The bottom line Do state estate taxes apply to life insurance proceeds? Sometimes. If you own the policy or retain rights over it at death, the benefit can be included in your estate, even when someone else receives it. State rules differ, so check your state and policy ownership before changing beneficiaries. Life insurance can … Read more

The bottom line Who owns life insurance after property division depends on the policy owner, the value built in the contract, the beneficiary record, and the divorce order. A term policy has no cash value to divide, while a permanent policy may have an asset value that the divorce process addresses. Check the policy and … Read more

The bottom line How long must life insurance be maintained after divorce depends on the final divorce judgment or settlement order, not a universal insurance rule. The order may tie coverage to child support, spousal support, or another stated obligation. Read its amount, beneficiary, owner, and end condition before changing the policy. The answer is … Read more

The bottom line How policy ownership affects estate tax inclusion turns on who held the policy’s ownership rights at death: the death benefit is generally included in the gross estate when the insured held incidents of ownership, even if someone else receives the proceeds. A valid transfer can change the result, but timing and retained … Read more

The bottom line To answer how are incidents of ownership defined, look at the control rights a person holds over a life insurance policy, such as changing beneficiaries, surrendering coverage, or borrowing against cash value. IRS Form 706 instructions use those rights to determine when policy proceeds are included in a decedent’s gross estate. In … Read more

The bottom line What happens to life insurance ownership when moving between community property states depends on each state’s property law, the policy’s purchase and premium history, and any marital agreement or court order. A move does not automatically retitle a policy, so preserve records and get state-specific advice before changing ownership or beneficiaries. A … Read more

The bottom line Can divorce decree control life insurance payout? Sometimes. A divorce judgment can require a former spouse to keep coverage or preserve a beneficiary choice, but the insurer, the policy record, and state law still matter. Review the decree, confirm the policy details, and ask a lawyer about enforcement before relying on the … Read more