Beneficiary Reassignment

[RaleighNC]

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

My parents were divorced several years ago but my Mother remained as the beneficiary of my Father's life insurance policy. Now that he has passed, she would like to split the proceeds with my sister and I. Other than accepting the full benefit amount and gifting it to us annually, is there an option to divide the proceeds amongst the 3 of us at the time of payout without incurring any tax liability?

 

[tranquility]

Not that I am aware of. The money is hers already. Nothing, except for a disclaimer, can change that. A disclaimer is total. One cannot disclaim only a portion. Even then, with a disclaimer, the result would not necesicarily be that you get the money. She cannot disclaim and also decide who should get it.

 

[Dandy Don]

How much money are we talking about here? You may want to suggest that she consult with a CPA or tax accountant to figure out what the tax implications are and to deduct the taxes before the split is made so there may possibly be no tax consequences for the people she gives the money to, depending on how much they receive.

 

[RaleighNC]

Thanks for the input. It looks like "gifting" will be the best solution. It will fall within the $1m lifetime exclusion.