Often you will want your child to be a contingent beneficiary
on life insurance or retirement accounts, naming your spouse or the child's guardian as the primary beneficiary.
The policy owner names the spouse as the primary beneficiary and an ILIT as the contingent beneficiary
of the policy.
They include naming DAV as the partial or contingent beneficiary
of a policy, or the sole beneficiary of a policy that's no longer needed for its original purposes.
One strategy is for the spouse to disclaim the proceeds of the death benefit of the policy on the deceased, at which time it is paid to a contingent beneficiary
, which could be a trust outside of the estate of the surviving spouse.
For life insurance, annuities, qualified retirement plans and IRAs, the property in question will pass to the contingent beneficiary
when the designated primary beneficiary disclaims.
The tax attributable to the inclusion of that income in the gross income of that beneficiary for the year that income is distributed or distributable under subdivision (b) shall be the aggregate of the taxes which would have been attributable to that income had it been included in the gross income of that beneficiary ratably for the year of distribution and the five preceding taxable years, or for the period that the trust accumulated or acquired income for that contingent beneficiary
, whichever period is the shorter.
You just have to name CLF as beneficiary or contingent beneficiary
after your spouse.
A: Generally, tax applies to the entire taxable income of a trust, if the fiduciary or beneficiary, other than a contingent beneficiary
, is a California resident, regardless of the residence of the settlor (California Revenue & Taxation Code section 17742(a)].
The most important rule in this subset states that the age of the oldest trust beneficiary at the account owner's death, whether the special needs beneficiary or any contingent beneficiary
, will be the measuring life for determining the rate at which retirement funds must be distributed to the trust and, therefore, taxed.
But see NKS Distributors, Inc v Tigani, 2010 WL 2011603 (Del Ch 2010) (unpublished) (holding that communications were privileged because the contingent beneficiary
"more closely resembled an adverse party," where the communications related to how the trustee should "deal with problems" that the trustee believed the beneficiary was causing).
--A contingent beneficiary
is one whose bequest is reliant on some occurrence outside the control of the transferor.
The contingent beneficiary
will receive the SGLI proceeds if the principal beneficiary dies before the servicemember.