Life insurance ownership

[linglese]

What is the name of your state?What is the name of your state?What is the name of your state? Pa
Can I as a hi net worth individual make my children owners of a life insurance policy so as to keep the death benefit proceeds out of my estate in the event of my premature death, before I have spent down my assets, an event which would in fact create an estate tax obligation?

What is the minimum age for someone to own a LI policy?

Do PA regulations stipulate that an owner must be determined capable of paying the premiums on a policy even if the payor will be the parent, ie insured, and accepts responsibility for making the payments? And can a broker refuse to write a policy structured this way if those are my requests and I accept that responsibility?
thank you

 

[somarco]

Your questions would be best answered by your estate planner, who is infinitely more familiar with your situation than anyone on this forum. Those with substantial assets have many more considerations than just estate taxes as they may apply to ownership of life insurance.

That being said, one way to keep the policy out of your estate is through a transfer of ownership. If the policy is large it may not be practical to have multiple owners. Of course the alternative to multiple owners is multiple policies which also over-complicates matters.

Keep in mind the owner of the policy also has access to any cash value and can borrow against the policy. They may also be able to sell the policy for value which can negate any estate plans you have made.

Use of an ILIT is one way to remove the policy from your estate and avoid the problems of having one (or more) individuals control the policy.