The reason: Life insurance proceeds aren't included in your estate if held by a trust.
Then, to the extent estate taxes are due, the insurance proceeds can help cover them.
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Y. supermarket business, will have insurance proceeds (which aren't taxed) to satisfy estate taxes.
The company notes that lower sequential profits from product revenue will bemore than offset by the insurance proceeds.
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Life-insurance proceeds, gifts and inheritances are also not subject to the tax, nor are appreciated assets donated to charity.
Someday when you die, the trust will receive the insurance proceeds and pay them out to the beneficiaries listed in your trust.
If the spouse is unaware of the buy-sell agreement and has not consented to it, there is the risk that the payout of the life insurance proceeds will be disputed.
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Because life-insurance proceeds at death aren't subject to this tax, a taxpayer could buy a policy, borrow from it and settle up at death, avoiding income tax on investment gains within the policy.
Skidmore includes all home equity in parental assets but makes exceptions, such as (in one recent case) for a widow who had used insurance proceeds to pay off her mortgage, says Robert Shorb, Skidmore director of student aid and family finance.
That suit sought to recover life insurance policy proceeds for the families and heirs of the millions who lost their lives in the Holocaust, many of whom had purchased life insurance policies.
Apart from government grants and loans, the bill is expected to be paid from the proceeds of insurance on the old building (not much, it turns out), plus donations.
Allianz is one of seven European insurers named in a law suit, filed recently in New York by victims' heirs, seeking the proceeds of unpaid life-insurance policies.
There's nothing illegal about this, and in fact most U.S. states require funeral homes to invest 70% or more of the proceeds in a trust account or insurance policy that can be drawn upon only when the customer dies.
In some limited instances, a life insurance policy may be paid out prior to death and those proceeds are excluded from income.
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