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Beneficiary doubt

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kevancc

New member
Hi everyone,

This website has been really helpful lately for me but I have a question I can't find an answer to..

What is the upon death tax difference of making a Revocable Living Trust (Texas) the beneficiary on my Term Life insurance policy versus a family member as the beneficiary?

Looking forward to hearing from you all

Kevan
 


LdiJ

Senior Member
Hi everyone,

This website has been really helpful lately for me but I have a question I can't find an answer to..

What is the upon death tax difference of making a Revocable Living Trust (Texas) the beneficiary on my Term Life insurance policy versus a family member as the beneficiary?

Looking forward to hearing from you all

Kevan
Life insurance is not taxable income. Why do you want your trust to be the beneficiary? What are you trying to accomplish in doing that?
 

Taxing Matters

Overtaxed Member
What is the upon death tax difference of making a Revocable Living Trust (Texas) the beneficiary on my Term Life insurance policy versus a family member as the beneficiary?
There is no income tax difference. Assuming you both own the policy and paid the premiums on it then the death benefit paid under the policy is not taxable income to the beneficiary. There may be an estate tax difference in having the insurance paid to a spouse rather than someone else, however.
 

Taxing Matters

Overtaxed Member
Life insurance is not taxable income. Why do you want your trust to be the beneficiary? What are you trying to accomplish in doing that?
One possibility is that he/she wants the insurance proceeds divided up among several people, which can be easier to do via a trust than trying to make several people a pay on death beneficiary of the insurance policy.
 

LdiJ

Senior Member
One possibility is that he/she wants the insurance proceeds divided up among several people, which can be easier to do via a trust than trying to make several people a pay on death beneficiary of the insurance policy.
I realize that is one possibility, but I had hoped that the OP would give us his/her specific reason.
 
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