You can make a huge difference by just naming DAV as a
contingent beneficiary or even a recipient of a small percentage of your estate.
This class is appropriately called the
contingent beneficiary.
In her files, along with the policy itself, were a document showing that a further policy loan had been paid up in 1958 and a 1982 change of beneficiary form that changed the beneficiaries from her now-deceased parents to her husband as primary beneficiary and me, her oldest son, as
contingent beneficiary.
The tax, then, is calculated and paid under subsection (d), which states that 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 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 is shorter.
The policy owner names the spouse as the primary beneficiary and an ILIT as the
contingent beneficiary of the policy.
Zulkiewski (but the opinion does not reveal this information), on a form supplied by them, to change the primary beneficiary of the policy to his mother, Sharon Zulkiewski, and the
contingent beneficiary to his father.
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.
Except for Schuber's designation of the annuity's
contingent beneficiary, Neasham viewed the transaction as straightforward--one of many the veteran life insurance agent had carried out of a popular product since it became widely available the same year.
You just have to name CLF as beneficiary or
contingent beneficiary after your spouse.
If a clearly named
contingent beneficiary is used, there would be no problem; if no
contingent beneficiary is named, the estate is normally the beneficiary.
