Estate Planning Pitfall – You’ve waited too long to transfer ownership of your life insurance policy
Abstract: Generally, the proceeds of one’s life insurance policy are included in their taxable estate. A person can remove them by transferring ownership of the policy, but there’s a catch: Wait too long, and one’s intentions may be defeated. Essentially, if ownership of the policy is transferred within three years of a person’s death, the proceeds revert to their taxable estate. This brief article explains why an irrevocable life insurance trust should own the proceeds.