Life Insurance

[kbrandon69]

What is the name of your state (only U.S. law)? WY

In 2007 my ex-husband and I divorced. In the divorce settlement both of our life insurance policies were to be put in trust for the kids. Niether of us had gotten around to setting up the trust so we left each other as beneficiaries. In November 2009 he passed away and I transfered the life insurance proceeds, since th money was left to me, into Irrevocable Trusts that I set up after his death. Since his estate is greater than $3.5 million they are saying that the kids will owe estate taxes on this money. The estate went directly to both kids but since his will did not address the life insurance policies, would it be considered an asset of the estate?

His personal rep is stating that I should have put this money into the estate trust which I do not agree with. These insurance proceeds had different age and schooling requirements than did the will and my life insurance policies became part of the trust I set up. In addition to I was under a court order (divorce decree) to make these provisions.

 

[anteater]

If he was the owner of the policy at his death, then the proceeds are included in what is known as his gross estate. That is different from his probate estate and is what any federal tax liability is based upon.

You need to get a copy of the will to see what it says about any estate tax liability. And probably need to consult with a WY probate or tax attorney to determine what, if anything, WY law states about the apportionment of any estate tax liability.