Life Insurance

Using life insurance in Oklahoma can be a useful tool in an estate plan.  When using life insurance some of the issues that need to be addressed with a professional legal adviser and tax adviser include:

  • Are the life insurance proceeds includible in the person’s gross estate?
  • Does the life insurance policy trigger any gift tax?

Technical rules are used in determining when life insurance proceeds are includible in the person’s gross estate.  In order to make the determination, some of the following are important to consider:

  • Are the proceeds payable to the insured’s estate, or on it’s behalf;
  • Did the decedent posses any incidents of ownership at the time of death;
  • Did the insured transfer ownership of the policy within three years of their death.

If the life insurance proceeds will cause the estate to exceed the federal or state exemptions, one estate planning tool to consider when consulting with a competent legal advisor is an irrevocable life insurance trust.

Of course any life insurance product needs to be evaluated like any other financial investment decision to determine if it makes financial sense.

This article was written 1/25/2015 by Todd Willhoite, an estate planning attorney in Claremore, specifically for the Oklahoma jurisdiction.  A different result may occur in a different jurisdiction and the law does change, so it is important to seek competent legal and tax advice from professionals before acting on anything written in this article.  Abby Law Offices Inc. is a law office that handles estate planning law in Claremore, Oklahoma.