Accordingly, the proceeds are includable if they are payable to or for the benefit of the insured's estate, or if the insured possesses any incident of ownership
in the policy at the time of his or her death.
The core incident of ownership
is the power to select investment assets by directing the purchase, sale, and exchange of particular securities.
This occurs when a client who has transferred ownership of the policy to another individual or trust retains an incident of ownership
Although the right to reversion, which had previously been excluded from consideration as an incident of ownership
, was now added to the list of factors considered incidents of ownership, the sole focus on incidents of ownership now meant that through proper planning it was possible to have a taxpayer furnish the premium payments for an insurance policy on his life without triggering gross estate inclusion.
June can't make direct gifts to the trust without creating an incident of ownership
Yes, the entire value of the proceeds must be included in insured's gross estate even if insured possessed no incident of ownership
in the policy, and paid none of the premiums.
9) However, if the spouse dies before the insured, and the spouse's interests in the policy cash values pass in any way that cause the insured to have an incident of ownership
in the policy, upon his subsequent death the death proceeds will be included in his estate.
The proceeds would be included only if the three-year rule of IRC Section 2035 discussed above applied or if the surviving insured retained an incident of ownership
in the policy.
Such policies may be in the deceased's estate for three years from the date the insured last had an incident of ownership
6) Regardless of whether the domestic corporation is a general or limited partner in the partnership, the focus should be on who has the core incident of ownership
-- the right to vote the foreign shares.
The mere right to change the time or manner of payment of proceeds to the beneficiary, as by electing, changing, or revoking settlement options, has been held an incident of ownership
, but the Tax Court and the U.
4ai) Where the death proceeds are payable to the partner's personal beneficiary, the insured is deemed to own an incident of ownership
in the insurance in his capacity as a partner for purposes of IRC Sec.